Exploring

Yet to be
explored
Existing
Customers
we know more about the surface of the moon than
we do about the oceans which cover 71 percent of
the Earth's surface. More than 95 percent of our
oceans remain unexplored, which means that
more than 68 percent of Earth remains unexplored!
Think of the customers you don't have as the moon
and your existing customer base as the Earth.
 Who are they?
Why do they buy from us?
Are they all Equal?
What do we do to keep them?
What is that we have to serve them
better?
What is that we do to serve them
better?
How do we know that whether we are
meeting their basic need or satisfying
them or delighting them?
What Value they add to us?
Existing How many man hours are spent on
Customersthem?
 What are the Criteria for
differentiating customers?
Current Sales Revenue and
Profits
Future Sales Volume and
Profits
Financial Security
Acquisition Potential
Coherence with Firms
Strategy
Supplier Valued by the
 Degree of Closeness

Deliver
Superior
Value:
Products and
Services
Vendor Quality Partners
Supplier hip

Commodity Add
Relationshi Organizati
onal Value
 Who are they? Do we have the
universe?
How are they currently meeting their
need?
Where are they located?
Why should they buy from us?
How are we reaching out to them?
What process we have in place to
monitor the progress of reaching and
engaging them? Who does what and
when?
What do we have that enables the
faster conversion?
Exploring How many man hours are spent on
them?
 Who are they?
What process we need to have to
reach out to them and engage them?
What infrastructure we need to have
to do so?
What is the total value of the
opportunity?
What limitation we might have?
What are they currently buying?
Can we divide them into groups
based on the value we create for them?
Do we need to tweak the value? Or
the current value is good enough?
What are the factors that can help us
Yet to meet their basic need/ satisfy
exploredthem/delight them
 Customer Distribution

Largest 10% of the Smallest 10% of

Customers the Customers

1 2 3 4 5 6 7 8 9 10
Yea 15% 17% 16% 13% 12% 10% 7% 6% 4% 1%
r1
Yea ? ? ? ? ? ? ? ? ? ?
r2
Yea ? ? ? ? ? ? ? ? ? ?
r3
 Customer Distribution
Largest 10% Smallest 10%
of the of the
Customers Customers
1 2 3 4 5 6 7 8 9 10
Yea 15% 17% 16% 13% 12% 10% 7% 6% 4% 1%
r1
Yea ? ? ? ? ? ? ? ? ? ?
r2
Yea ? ? ? ? ? ? ? ? ? ?
r3

% Absolute
Margin
Cost of Serving
Customers
What are the benefits for Key
Accounts?
Single point of contact
Congruence
Using the Criteria for
selecting Key
Accounts.
Using the Criteria for selecting
Key Accounts.

Step 1.
We like key accounts
that
 Using the Criteria for selecting
Key Accounts.
Step 1.
We like key accounts
that
Step 2.
What importance
weights do you assign for
each criterion from Step
1 such that total sums to
100
 Using the Criteria for selecting
Key Accounts.
Step 1.
We like key accounts that
Step 2.
What importance weights do you assign
for each criterion from Step 1 such that
total sums to 100
Step 3.
Account Opportunity Rating:
Considering customer X what rating
best represents its position on each
criterion (1=Low and 10=High)
 Using the Criteria for selecting
Key Accounts.
Step 1.
We like key accounts that
Step 2.
What importance weights do you assign for each
criterion from Step 1 such that total sums to 100
Step 3.
Account Opportunity Rating: Considering customer
X what rating best represents its position on each
criterion (1=Low and 10=High)

Step 4.
Develop Factor Scores. Multiply
numerical of 2 and 3
 Using the Criteria for selecting
Key Accounts.
Step 1.
We like key accounts that
Step 2.
What importance weights do you assign for each
criterion from Step 1 such that total sums to 100
Step 3.
Account Opportunity Rating: Considering customer
X what rating best represents its position on each
criterion (1=Low and 10=High)
Step 4.
Develop Factor Scores. Multiply numerical of 2 and
Step3 5.

Develop the Account Attractiveness

Score. Sum the figures of step
1.Attractiveness 2.Importn 3.Customer 4.Col 2 X
Criteria ace Xs Score on Col.3
Weights This Criterion
for
criteria
We like key accounts that
a. Are a good 25 4 100
cultural fit with our
firm
b. Provide us high 20 5 100
volume
c. Provide us high 15 7 105
gross margins
d. Offer good 15 8 120
potential for future
growth
e. Are 15 3 45
technologically
sophisticated
1.Business 2.Importa Supplier 4.Col.2 X
Strengths nce Firms Rating Col.3
Criteria Weights on This
for Criterion
Business
Strengths
Criteria
What business strengths must any supplier possess to be
successful with this KA?
a.Good R & D 25 7 175
b.Well trained 15 9 135
local sales Force
c.Low Cost 10 4 40
operations
d.High Quality 15 6 90
service
e.Deep Pockets 10 9 90
f.In-place 20 5 100
distributions
g.Fast moving 5 3 15
Managing the Key Account
Situation
Key Account Analysis
Planning Key Account
Strategy

Plan
Implementati
on

Coordination
and Control
 The Situation Analysis
Analysis of the Key
Account

Analysis Analysis of
of the
Competiti Supplier
on Firm
Planning
Assumptions

Opportunities and
Influencers Perceived Main Criteria for Deciding Comments
Influence Between Beta and
in Gamma
Purchase
Process
Mr.A, 5% 1. Tendency to stick with 1.Mainly a rubber stamp
Group VP, Staff the status quo
Operations
Mr.B, 40% 1. Opportunity to show 1. Give formal approval
Information major for purchasing decisions
Systems Division telecommunications 2. History of upsetting
supplier, Beta, that it established procurement
should treat Alpha more relationships
like a valued customer 3.Very aggressive;
moving upward in the
firm

Mr.C, 20% 1. Neutral to Beta; will 1.Reports to

Communications select best solution for Baker
Division firm 2.Major influencer
upgrading voice
networks
Influencers Perceived Main Criteria for Comments
Influence Deciding Between Beta
in and Gamma
Purchase
Process
Mr.D 20% 1. Seeks best way 1. Neutral to Beta; likely
Communication to solve to switch if convinced
Manager telecommunicatios 2.Aggressive risk taker
problem resulting from
divisions fast growth
2. Demonstrates his
innovativeness to senior
management

Mr.E 5% 1. Technology oriented; 1. Mainly a bystander but

Procurement likely to advocate critically interested
Manager supplier with because of his
technological edge upcoming RFP for a new
2. Aware of how all telecommunications
business units system
functions; interested in
full systems integration
Competitive Structure
Analysis
 Competitive Structure
Analysis

Curre
nt
Timing
of
Competit
ion
Potent
ial
Direct Indirect
Type of Competitor
 Supplier Supplier Competiti
Firm Firm ve Parity
Superior inferior to
to Competit
Competit or
or
Competitor A: Value Analysis
Technology
Product
Design
Raw
Materials
Manufacturin
g Operations
Marketing
 Supplier Supplier Competiti
Firm Firm ve Parity
Superior inferior to
to Competit
Competit or
or
Competitor A: Cost Analysis
Technology
Product
Design
Raw
Materials
Manufacturin
g Operations
Marketing
Competition Mapping

Cost Value

U Advantag
e
Advantag
e
The
Cost Value m
s Disadvant
age
Disadvant
age
Competition Mapping

Competition
Strategy
Prese
Past Future
nt
 O-T Matrix
Trend in Business At the Key
Account

High

Supplier
s Mediu
Competi m
tive
Strength

Low

Declining Steady Growing

 Strategic Focus
Improve Profits
Maintain and Increase Sales Volume
 Formulating Positioning
Statements
Competitor
Competitor 1 Competitor 2
Custom 3
Relative
er Bene Rank Bene Rank Bene Ran
importa
Benefit fit fit fit k
nce
s

A 1 A 1 A 2 A 3
B 2 B 1
C 3 C 1 C 2
D 4 D 2 D 1