Application: Sales to Major Customers
This concept concentrates specifically on the need to analyse and service important customers. The reality for many firms is that their revenues are dominated by a relatively small number of important, repeat customers. So, for many marketers, their day-to-day job is focused on the needs and opportunities within a small group of significant buyers rather than the mass markets which absorb so much of marketing research and thinking; the so-called Pareto principle. Yet, this perspective is barely covered in marketing courses and tends to be neglected in text books on the generic principles of marketing.
There are several aspects to effective account management:
(i) Prioritizing the Customer Accounts
Two researchers (Woodburn, D. and McDonald, M.H.B., 2011) found, rather alarmingly, that 85% of Western European companies had no idea whether or not they made or lost money from their major customers. So, marketers have to start by identifying their most important customers. This can be as crude as listing them by volume of business and ranking accordingly. Some focus on their “top 100” (produced in this way) or some version of it. Others have tiered layers ...