across regions that institutionalize custom er relationships. Raising custom er sw itching costs 3 e.g., supply chain elevates interdependencies and com petitive distinction.<br><br> 3 Risks and Costs of Global Account Managem ent. Low est national price, term s and/ or conditions becom e the global standard. Pricing inconsistent w ith local service requirem ents 3 e.g., low er price than historical and higher service com m itment.<br><br> Loss of internal support and conflict w ith geographic m anagers 3 from dim inished roles of geographic m anagers. Restructuring the organization to accom m odate global custom ers 3 incurring additional fixed costs. I m plem enting controls and com m unication channels betw een all levels of m anagem ent and across geographies.<br><br> Hiring appropriate m anagers and resources w ith skills and know ledge to w ork in foreign environm ents. 4 Sim ilarities Across Successful Global Account Managem ent Fram ew orks. Cross-country reach 3 not necessarily to all countries, but: 3 to most important ones; 3 for most important customers; and 3 for most important activities.<br><br> Goal 3 coordinated, consistent w orldw ide service. A global account m anagem ent structure. 3 One point of contact.<br><br> Through assigned Global Account Manager (GAM). Resident near customer 9s headquarters. 3 Focused account team.<br><br> 3 Coordinated cross-country sales/service resources. Solutions-oriented, value-added or interdependency- oriented custom er/ supplier relationship. Account inform ation system s track account details and activity country-by-country.<br><br> 5 Dim ensions of GAM Com pensation. GAM responsibilities: 3 worldwide customer sales, support and satisfaction; 3 assurance company is: perceived as one company at all customer locations; and organized and staffed to service opportunities in global account. 3 leading dispersed resources assigned to support account.<br><br> 6 Dim ensions of GAM Com pensation. Perform ance m etrics: 3 worldwide performance of global account (revenue, costs, profitability); 3 revenue and profit management span: account quota by country; and country quota by product/service. 3 cost management: encompass full costs 3 e.g., staffing, cost-to-serve, discount expenses; and compiled and held separately country-by-country.<br><br> 3 may include metrics pertaining to company 9s overall global account program 3 to ensure: transfer of learnings associated with working with customers; and efficiency gains and reduced costs are realized. 7 Tw o GAM Com pensation Profiles. Critical Sales Success Factors Product innovation and supply chain execution Engineering and manufacturing capabilities, outsourcing Consum er Products Com pany Medical I nstrum ents Com pany Sales Objective Use new products to renew sales in ctired d products Grow sales significantly through high-value systems sales Team Perform ance Goals Excellent Outstanding 102% of Quota 106% of Quota 130% of Quota 140% of Quota Target Perform ance Total Pay Incentive Base Salary $140,000 $20,000 $120,000 $140,000 $60,000 $80,000 Salary/Incentive Mix 86/14 Salary/Incentive Mix 57/43 Excellent Perform ance Total Pay Incentive $165,000 $45,000 $215,000 $135,000 73/27 37/63 Outstanding Perform ance Total Pay Incentive $190,000 $70,000 $290,000 $210,000 63/37 28/72 8 Tw o GAM Com pensation Profiles.<br><br> Critical Sales Success Factors Product innovation and supply chain execution Engineering and manufacturing capabilities, outsourcing Consum er Products Com pany Sales Objective Use new products to renew sales in ctired d products Grow sales significantly through high-value systems sales Team Perform ance Goals Excellent Outstanding 102% of Quota 106% of Quota 130% of Quota 140% of Quota Portion of Overall I ncentive Opportunity 3 Overall Account Performance 3 75% at Quota declining to 68% at Outstanding 3 Product Category Performance 25% at Quota and Excellent 32% at Outstanding 3 Pay/Performance Accelerator Above quota opportunity for product category rises somewhat faster than team award 3 Overall Account Performance 3 45% at Quota declining to 15% at Outstanding 3 Product Performance 55% at Quota 77% at Excellent 85% at Outstanding 3 Pay/Performance Accelerator Above-quota opportunity for product category rises faster than team award Out-perform bonus picks up the pace of product incentive escalation Medical I nstrum ents Com pany 9 GAM Com pensation Success Factors. Perform ance and activity tracking/ reporting: 3 reinforces geographic and account responsibilities of assigned resources; 3 facilitates balance of geographic, product and customer sales strategies; and 3 enables GAM decisions independent of geography. Pay strategy and incentive system s encourage cooperation across country, national and global account m anagers.<br><br> 3 GAMs linked to worldwide account performance. 3 Country-resident sales resources connected to both: " country-specific global account results; and " worldwide account performance. Com pensation linked to the profitability of the overall account relationship 3 com pelling a focus on long-term relationship profitability rather than transactions.<br><br> 10 A Clear Perform ance-crediting Policy Facilities Quota Setting and Ensures Proper Paym ent. Single Credit Credit only one resource for sale. Simple.<br><br> Easy to administer. Doesn 9t work in team environment. Description Advantages & Disadvantages Split Credit Each resource involved in sale receives partial recognition.<br><br> Role in sale, resources involved and policy determine split. Percentage credit totals 100%. Provides recognition/reward 3 based on contribution.<br><br> Encourages teaming. Crediting disputes can arise. Pressures quota allocation accuracy.<br><br> Quota setting is business as usual. I m pact on Quota Allocation Split credits must be included in GAM and team quotas. 11 A Clear Perform ance-crediting Policy Facilities Quota Setting and Ensures Proper Paym ent.<br><br> Credit multiple resources involved in sale. Role in sale, resources and policy determines credit. Total credit 100% 3 e 200%.<br><br> Can increase cost of sales. Pressures quota allocation accuracy. Masks performance against business plan.<br><br> Quota > business plan can be confusing. Description Advantages & Disadvantages Each account, geographic and country resource receives full credit. Total credit e 100% Optimizes cooperation.<br><br> Increases cost of sales if not rigorously modeled and calibrated incentive. Works best in higher volume and attractive margin situations and where efficiencies can be captured in cost-to-serve. Double or Multiple Credit Sum of quotas greater than business plan.<br><br> I m pact on Quota Allocation Quota setting is business as usual. Full Recognition 12

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