Developing strategy for Firm’s

Customers
Firm’s strategy - “Commitment grid”

High
Recognition KAM is
of KAM Strategic

BREADTH

Left to Experiment
Luck KAM

Low
Low High
DEPTH
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Vision for Key Accounts

• Cisco: “To provide best-in-class business practices and

support to our worldwide Key accounts”

• DHL: “DHL will become the supplier of choice for express and
express logistics services to targeted global account customers
by becoming an essential part of their business plans to
achieve their strategic goals”

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Key accounts at different levels

• At the corporate level

• At the business unit level

• At the regional level

5
KAM applicability

• Direct customers

• Indirect customers

• Complementary product suppliers

• Other influencers in the network

6
Selecting Key accounts

• Economic relevance
– Current and Future Sales and Profits

• Organizational relevance
– Strategic synergies
– Mutual respect
– Cultural fit

• Peripheral relevance
– Trophy customers (Opinion leadership)
– Acquisition potential

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Creating the Criteria for selection of Key
Accounts

• Step1: “We like key accounts that ….”

– List the attributes / factors

• Step2: “What importance these factors carry?”

– Weighting of all factors should sum up to 100

• Step 3: How would I rate Customer X on each of these factors

on a rate of 1 – 10 (1 being the lowest and 10 being the
highest)
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 Example

1. Attractiveness Criteria for 2. Weighting 3. Customer X’s 4. Score (2*3)

key accounts Score on this
factor

“We like key accounts that…”

a. Are a good cultural fit 25 4 100
b. Provide us high volume 20 5 100
c. Provide us high profits 15 7 105
d. Offer good potential for 15 8 120
future growth
a. Provide innovation opportunity 15 3 45
b. Act as trophy customer 10 4 40

Key account Attractiveness Score 100 510

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Identification of Key accounts

Tiers Key account attractiveness score

• Tier I accounts >500

• Tier II accounts 400-500

• Non-Key accounts <400

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 Business Strength of Supplier firm

1. Business Strength Criteria 2. Weighting 3. Supplier’s 4. Score (2*3)

for my firm Score on this
factor

“What business strengths must any supplier possess to be successful in this

account”
a. Good R&D 25 7 175
b. Well-trained local sales force 15 9 135
c. Low-cost operations 10 8 80
d. High Service Quality 25 6 150
e. Investment capability 10 6 60
f. High degree of responsiveness 15 6 90

Business Strength Score 100 690

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Approach to Key Account Management

High

Key Account
Attractiveness

Low
Low High
Business Strength
12
Approach to Key Account Management

High
PROTECT
and
HARVEST

Key Account CAUTION

Selectively
Attractiveness Build

DIVEST

Low
Low High
Business Strength
13
@Risk Key Accounts

High

Key Account
Attractiveness

Low
Low High
Account
Vulnerability 14
Other considerations for allocation of resources

• Harvesting existing key accounts

• Developing new key accounts

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