BASIC STRATEGY GUIDE: STEP 3



Activity One (Steps 1-12):
Segment customers, both by size and by need, to identify targets for the Company.


Step 3: Understand the size and purpose of multiple roles in customer relationships.

What:

Determine how many suppliers the average customer in each size segment uses to meet its needs. Find the reasons for the Supplier Roles other than the Primary Role.

Purpose of Roles: Industry Examples »

Why:

This step prepares for a further size segmentation of customers. When customers buy from several suppliers, the amount of purchases they make from each supplier varies significantly. When we calculate the economic worth of a customer to the company, the real “size” of the customer is the amount the customer will purchase from the Company, not the total purchases of the customer.

What to Watch For:

Action:

Consider the roles the Company can fill. The strategic roles in any customer relationship are always the Primary or the Secondary roles. The Company should determine the customer size segments where it comfortably fills either of these roles.

More Information on the Size of Roles on the Advanced Site

More Information on the Purpose of Roles on the Advanced Site


For helpful context on this step:

Videos:

Perspectives:

Symptoms and Implications:


Guide IndexNext: Basic Strategy Guide Step 4