This double-feature viewpoint combines two strategic truths that most organisations ignore to their own detriment:
- Why Key Account Management (KAM) fails in practice, even when the intention is right
- Why marketers are constantly torn between customers and shareholders — and what to do about it
Part 1 – Why Companies Get KAM Hopelessly Wrong
Despite 25+ years of Activity Based Costing, most companies still don’t understand the real profitability of their major customers. Instead, they continue allocating fixed costs by turnover, rewarding expensive-to-serve accounts and penalising the profitable ones. Malcolm argues that:
- Most companies still think KAM is “just selling to big customers”
- They deploy the wrong people — often salespeople without business acumen
- KAM requires MBA-level generalists, not product pushers
- Important customers hate being sold to — they want strategic solutions
Action Points:
- Run activity-based costing on your top five accounts
- Stop treating all customers as equal — some need investment, others need divestment
- Segment accounts based on future profit potential and competitive strength
Part 2 – The Marketer’s Dilemma (Marketing Due Diligence)
Marketers are caught in a fundamental conflict:
- Customers want maximum value for minimum cost
- Shareholders want maximum return for minimum risk
Malcolm introduces Marketing Due Diligence as the tool to resolve this — a method to assess the risk embedded in marketing strategies, quantify it, and demonstrate their potential for shareholder value creation.
Marketing Due Diligence identifies three types of risk:
- Market risk – Is the market as big as we think?
- Share risk – Can we win the predicted share?
- Profit risk – Can we deliver the expected margin?
Done well, this process helps marketers justify strategy at board level — and empowers boards to back growth strategies with confidence.
Quote
“One of the quickest ways to go bankrupt is to ‘delight’ your customers.” – Professor Malcolm McDonald
Download the Full Viewpoint
This summary combines both perspectives — the full PDF includes graphics, audit recommendations, and implementation steps.