Measuring partner potential

This graph enables the supplier to see both the financial value of an account, plus, by scoring value drivers, the potential it offers for the future.

The two axes plot the account against its contribution margin to the supplier and also the cost to serve the account for the supplier as a percentage of sales.  Generally speaking, one would expect the accounts which contribute more to be more expensive to serve.  But the exercise often highlights low contribution accounts, which cost a lot of time and money to serve.

The inner circle measures the current value of the account – in other words, its overall profitability.  This is revenue minus the cost to serve, the cost of the goods and the cost of capital.  The outer circle measures how the account scores by future value drivers.  This is the potential it offers for the future and the aggregate measure of the "non financial" value added by the account. 

Obviously the calibration depends upon what the individual supplier wants. But, typically, an account which understands potential customers, which can drive you into new markets and with whom you have a good relationship would score highly, whilst an account which did little more than take orders and send out products to existing markets would score poorly.