It’s all about profitability. Two business facts that you mightn’t not believe or even agree with, however, if you looked objectively at your customers you will agree.
20% of your customers produce 80% of your profits!
If take the time to analysis and indentify which customers these are you could potentially dramatically increase your profitably.
The trick is to focus your resources and time on those customers you make the most profit on. Why bother wasting your valuable resources on those you don’t make money out of!
Identify why those customers are profitable armed with this information, you can use the resources and time you saved from those you didn’t make money out of, finding more customers like them further increasing your profitability.
50% of your customers you don’t make any profit on their sales!
I know it seems harsh to fire some of your customers but if you don’t make any money out of them they are costing you money and your profitable customers are paying for it!
Before firing these unprofitable customers it’s a good idea to identify why the reasons they are unprofitable. Your cost of sale might be too high for their sales volume and they way to make them profitable could be to set a minimum order value or volume or you might need to set up other sales channel such as telesales or internet ordering rather than face to face selling.
If you still can’t make them profitable then write them a nice letter telling them that they have been great customers but you can no longer afford to economically support them even suggesting an alternative supplier.
New Mindset can help you to identify your profitable customers to increase your profits.
Call Andy on 01276 537 282 or email andy.hamer@new-mindset.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment