Posts Tagged ‘customers’

3 Growth Strategies That Always Work

Tuesday, September 2nd, 2014

Here are 3 strategies that work for privately owned businesses in any economic conditions.

3 strategies that work for privately-owned businesses in any economic conditions

Guaranteed.

I’m going to be really bold and also say they will work in any industry.

Interested?

1. Keep costs down – but quality up.

Twenty small and medium-sized companies, based in the U.K., managed high growth by keeping their production costs under control and their prices competitive.

Even when the economy slumped, they kept their quality up even though that meant their prices were slightly higher than their competitors.

That way they kept their customers satisfied – and avoided price wars.

2. Differentiate on tangibles – not intangibles.

Thirteen of the companies were consistent innovators, regularly introducing new products, services or processes.

Five of them, all manufacturers, consistently allocated a large percentage of revenues to developing new products.

In contrast, 15 of the 20 spent relatively little on traditional marketing activities, using their sales force and the Internet to keep customers up-to-date on their new products or services.

3. Customization.

Almost half of the companies stayed very closely in touch with their customers, delivering solutions tailored to specific needs and adapting products as needs changed.

Even those who produced standardized products invited small changes or provided complementary services.

Flouting conventional wisdom, 75% of the companies spurned niches for the broader market. They took time to figure out their competitors’ strengths and weaknesses, then exploited their knowledge to increase their market share.

The 20 companies in the study grew at a consistent rate over a 4-year period—outpacing their competitors by more than 50 percent while operating in declining industries – for example, the clothing industry.

Think about it – keep your costs under control; understand what your customers need, and then give it to them; introduce new products and services regularly.

Put that way it almost sounds like common sense.

So, if these approaches work in a tight economy or mature markets, why wouldn’t they work in good times and healthy markets?

The short answer is that they will.

I’ll make 2 more points as a wrap up.

  • These 3 approaches aren’t mutually exclusive. In fact, the British companies used a combination of them – usually the second and third.
  • The authors of the study commented that the owners and managers saw the situation as offering a challenge and lots of opportunities. As they say – attitude is everything.

If you enjoyed this post you’ll also enjoy The Keys to Executing a Strategy and Getting Results.

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

 

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Strategy And The Sales Force

Tuesday, August 26th, 2014

“It’s as plain as the nose on your face!”Funny glasses

One of my aunts used to say that when one of us kids overlooked something by not looking at a situation in a complete way. We saw the obvious – but missed the subtle message.

I was reminded of that yesterday.

I was reading about how, in the mid-1990s, Xerox missed an underlying technological change taking place in their industry.

The sales force was focused on maintaining market share in the face of lower cost competitors like Canon.

But, even though they were visiting companies every day, they missed the fact that people were beginning to use PCs and printers to produce copies.

How did this happen? How could something, so evident in retrospect, have been missed?

One answer is that sales and strategy are separate worlds, often disconnected from each other.

No doubt that’s true. But it’s not just a process or functional issue.

Before becoming a CEO, I spent time in sales and then managed sales forces.

I also worked in companies which had entrenched positions in their industries and which failed to respond to structural shifts.

So here’s my question. Even if the sale force had spotted the change, would anyone have listened to them?

Market dominance can breed a culture in which owners and management develop the belief that they can do no wrong. Their attitude is…….

We’re doing what we’ve always done and that’s resulted in success for many years now. If growth slows or sales actually decrease, that must be because the sales force have stopped being effective.

Instead of complaining about products not having enough features or prices being too high, the sales people need to focus on making calls. What’s needed is a sales training program. And if that doesn’t work, then we’ll replace a few of them.

If things still don’t turn around, we’ll have a look at our marketing programs.

By which they really mean the promotional programs, if any, because they’ve forgotten that marketing also includes pricing and product strategies.

I was on the receiving end of attitudes like these when I worked in corporations.

And, in the last 13 years, we’ve worked with many privately owned companies after sales training and marketing programs failed to restart growth.

So, before reaching for the process or functional solutions, take a moment to check the culture and attitudes. However improbable, that might lead to the answer.

 

If you enjoyed this post you’ll also enjoy Is Crushing the Competition a Strategy?

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Is “Crushing The Competition” A Strategy?

Tuesday, July 22nd, 2014

Saying you’re going to crush the competition may provide the emotional fire to drive a sales team to beat its short-term revenue targets.It is possible to win without crushing the competition.

But as a strategy for the whole business, it’s not only ineffective, it’s dangerous.

Here’s why.

1.  It puts the focus in the wrong place.

A successful strategy focuses on customer needs; the value proposition with which the company satisfies those needs; and the resources and capabilities required to deliver it.

Trying to crush the competition puts the focus on doing things “better” than they do.

It puts competitors, not customers, front and centre. It substitutes action based on original thinking, with reaction to someone else’s thinking.

2.  It sacrifices the long term for the short term.

Two common tactics for crushing the competition are providing more features for the same price and cutting prices.

However neither of them creates new value for customers, nor do they help the company’s long-term margins.

Businesses reap the biggest rewards when their strategies provide previously unrealized value for consumers and users by, for example, introducing new, or enhanced, products or services.

That, however, takes time and the willingness to take risk. It may also open up new parts of the market for everyone.

The iPhone, for example, didn’t just help Apple, it broadened the market for mobile devices. Fracking not only breathed new life into the U.S. oil and gas industry, it benefitted suppliers to the industry.

3.  Business isn’t like war.

Originally, strategy had its application in winning battles and wars. And the only way to win is to beat the other side; the more crushing the defeat inflicted on the loser, the better.

But in business, it is possible to win without crushing the competition.

How? By finding an untapped opportunity. For example, Starbucks redefined the coffee drinking experience and Jet Blue redefined discount travel.

In order to do that, both had to understand their competitors’ value propositions – a more productive, more effective, even healthier, way to deal with competitors.

I’m not suggesting that competitors can be ignored – but they have to be kept in context.

4.  Emotion replaces logic.

Finally, when leaders go to war with their competitors, emotion often overwhelms business logic. If it can happen to Steve Jobs – remember the repercussions from iMaps – it can happen to anyone.

In case you’re curious about what set me off on this particular rant, it was a post by Ken Favaro, one of my favourite writers on strategy.

 

If you enjoyed this post you’ll also enjoy Putting The Horse Before The Cart – That’s Strategy!

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Is Innovation Part of Your Growth Strategy?

Tuesday, July 16th, 2013

My friend Lisa Taylor is the founder of Challenge Factory, which offers unique career services for individuals and talent programs for companies.Innovation as a growth strategy for Canadian business owners

She, quite accurately in my opinion, describes her company as Canada’s innovation leader in career and talent management.

So it seemed only appropriate that Lisa would see, and forward, an article about a survey on firm-level innovation in Canada¹.

The results contain some interesting lessons about innovation as a growth strategy for Canadian business owners.

1.  The most successful innovation strategy is to provide products and services to new international markets. According to the survey, firms that do this earn between 10 and 30 per cent more net income than their counterparts using other approaches.

Yet more than 85% of Canadian firms prefer to operate within provincial or national borders, or in North America, rather than competing in international markets.

Perhaps this is a result of our conservative nature.

2.  More than half of the Canadian firms surveyed pursue a “user needs-driven” innovation strategy. This means they get new ideas for developing products and services from customers.

In comparison, about one-third of the respondents adopted a technology-driven innovation strategy – one that relies on exploiting advances in technology to gain a competitive edge.

The user-needs approach is probably less risky and may produce faster returns than the technology-driven.

3.  The most common challenges which slow down or prevent innovation include – fear of risk, lack of funding, lack of leadership focus and the organization’s culture.

The fear of risk and lack of focus make perfect sense as challenges to innovation and reflect what we see in our own practice. You can argue that, since a company’s leadership directly influences the culture, those 2 are related also.

4.  Internal cash is the number one source of funding for innovation in Canadian firms. Government financing comes second, ahead of private equity and bank financing.

And firms looking to expand the size of their markets/territory make more use of internal financing and less use of government funding or private equity than do firms with user- or technology-driven innovation strategies.

It’s not clear if the use of internal cash is by choice or by constraint. Either way, it’s interesting that neither private equity nor government financing is more readily available for market expansion, given the fact that the companies doing this achieve better average financial performance than other firms do.

5.  There is a strong correlation between the intensity of innovation efforts and company performance – but only if the innovation activities are well managed.

This should not be a surprise to anyone who follows my blog because it’s confirmation of a point I make often. If company A executes its strategy more effectively than company B, then company A will obtain the best results, even if company B has the better strategy.

You can read the article Lisa sent me here.

______________________________________

¹  2012 Survey Findings: The State of Firm-Level Innovation in Canada, published by The Conference Board of Canada’s Centre for Business Innovation.

 

If you enjoyed this post you’ll also enjoy 3 Things That Shape A Good Strategy

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It’s the Strategic Plan, Stupid

Tuesday, October 9th, 2012

With a title like “The beating heart of the enterprise, it’s the strategic plan, stupid” there was no way I wasn’t going to read the article.

As an added incentive it was a Q&A with a Harvard professor published in the top magazine for entrepreneurs and business owners. (Call me odd but I think that combination just has to be fascinating.)

So what were the pearls of wisdom? Here are 6 of them.

• Working with corporate types the Prof had always viewed strategy as a set of mechanical tools, a series of frameworks and analysis. But she quickly realized that entrepreneurs are emotionally invested in their strategies – which impact their employees and companies very directly. And business owners feel responsible because, compared to corporations, that impact is felt very quickly.

• Strategy is not only about making your company different – it’s about making it different in a way that matters to your customers. For example, becoming a “one stop shop” is only worthwhile if you know why one stop shopping is important to the people you expect to pay for it. Otherwise, no one will care.

• Entrepreneurs and business owners are more likely to create strategies that reflect their own character. For example, Michael O’Leary the CEO of Ryanair is apparently blunt and in your face. So their bare bones strategy has an aspect of bluntness bordering on rudeness – think of wanting to charge passengers to use the washroom – to it as well.

• Don’t make the mistake of getting into “strategy creep”. That’s Cynthia Montgomery, the Harvard Prof’s, term for businesses that add more services and more technology to reach more customers – and lose sight of what made them different in the first place.

• Business owners should treat their strategies as a living, breathing process that they think about on an ongoing basis. Not as something that is pulled out and dusted off once a year. Why, because what worked last year may not work 3 years from now. The difference a company makes has to be relevant to customers today – and every day.

• A major benefit of seeing strategy as being fluid and dynamic is that it can be adapted as competitors catch up or as customers’ needs change. Montgomery gives the example of Ikea’s constant search for new ways to do things and to save their customers money. She contrasts that with Gucci who lost touch and stopped responding to their market. That required a much more painful – and risky – change to their business model.

I like it when magazines targeted at entrepreneurs deal with topics like strategy. It reinforces the point that every company has to have a strategic plan and a process for keeping it relevant.

It can be formal or informal – I don’t care. But it must exist.

If you enjoyed this post you’ll also enjoy 3 Ways to Test Your Strategy.

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Are You Growing Too Fast?

Wednesday, October 3rd, 2012

We routinely tell business owners that a company can get into trouble when it’s growing just as easily as it can at any other time.

I’ve grown used to the looks of disbelief that come our way. And to the predictable question, “How can growing be a bad thing?”

The answer, of course, is that growth isn’t bad in concept. Like everything else, it’s the execution that is either good or bad; it’s how the owners manage what’s going on.

There was a good example of how things can go wrong – and how badly wrong they can go – in the HBR last month.

A family owned printing company saw sales hit an all-time high just as everything fell apart in 2008. The problem was that the bottom line wasn’t growing and they were eating into their line of credit because cash was tight.

All it takes is a decline in margins caused by price cutting – to drive an increase in sales – and a slowdown in customer payments because credit rules have been relaxed (also to bring on new customers) and cash becomes a problem.

In a mature industry like printing where the products have become commoditized, price cutting becomes a way of life.

It’s also a business in which you have to understand and watch costs carefully. Under-estimating a job can turn it into a loser quickly. And so can making a mistake and having to re-run the job.

How do you avoid getting into trouble while growing?

1. Don’t “buy” new business. Rather than compete on price, find ways to add value. Or offer “de-featured” versions of existing products and services at a lower price point.

2. Get a really good understanding of your operating costs and how they react when sales increase.

3. Keep a tight grip on inventory (if you have one) and Receivables (and most companies have those). Move quickly to get rid of customers that don’t pay on time.

4. Spend time getting to know your cash flow and how it is affected by growth. Remember – cash is king. A profit is good but you can’t take it to the bank. They only accept cash.

5. Don’t rely on your Income Statement to tell you what’s going on. It can tell you what has gone on – but it can’t give you a glimpse of the future. Only a cash flow forecast, your aged receivables, inventory turns and metrics like these will do that.

This is hardly an exhaustive list but it covers most of the basics.

One of the bosses I worked for never let us talk about sales; he insisted we talk about profitable sales. I thought he was nitpicking at the time but, in retrospect, I was young and foolish and he was much more seasoned and savvy.

Guess how we talk about sales now.

If you enjoyed this post you’ll also enjoy 5 Tips To Improve Margins and The Bottom Line…..

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Ask 5 Questions To Find Out What Customers Want To Pay

Tuesday, September 18th, 2012

I’m a Scotsman and happy to admit that I fit the “cost-conscious” stereotype that sticks to people from the country of my birth. In fact my friends call me “the canny Scotsman”.

While I’d hardly say that pricing strategy is my favourite part of what we do, I keep an eye open for anything that will give us – and our clients – an edge in that area.

That’s why a blog post about how to find out what customers will pay caught my eye.

The author, Rafi Mohammed, is a pricing consultant and he says that it’s as simple as asking your customers. My first reaction was that they won’t tell the truth. Human nature being what it is, it would be only natural for them to give a “low ball” answer.

But, as with so many things in life, it turns out that it’s not so much what you ask, it’s how you ask it.

Rafi suggests that, rather than ask the question directly, say that you’re carrying out a customer satisfaction survey. Tell your customers that you’re trying to understand what they like about your product or service so that you can serve them better in the future.

Then include these 5 questions in a series that probes general customer satisfaction.

1. “What competitive products did you consider buying?” If the answer is “none” then the customer is not price sensitive and you may have room to increase price. I think that, at worst, the answer will tell you who else your customers are looking at – a valuable piece of intelligence in itself. But, in this economic climate, I don’t think there are many companies that don’t consider alternatives.

2. “What do you think of our prices – are they too high or too low?” The logic is that some customers will clam up when asked this question – but that others will give a lengthy answer. Listen to the second group carefully, without probing any further, and then move on.

3. “What other features would you like added to the product/service?” I really like this question. The information you gather can be used to offer different versions of your service e.g. Silver, Gold and Platinum. It will also tell you what your customers would be willing to pay a premium for – fuel for the development of your next version of the product or service.

4. “What do you like and what don’t you like about our pricing strategy?” I like open ended questions like this. Everyone can find something to say, so the question gets people talking. And lays the groundwork for more probing.

5. “Are there other ways you would like – or even prefer – to buy our products?” This is the kind of question that – 9 times out of 10 – will produce an unsurprising answer. But that lone surprising answer, when it does come, could shake your current assumptions to their core.

If you want to read more, the blog post is called How to Find Out What Customers Will Pay.

By the way I’m not at all bothered being lumped into the Scottish stereotype. In fact I think being called “canny” – a term we Scotsman invented – is a compliment. The Pocket Oxford Dictionary defines it as “shrewd and cautious; worldly-wise; thrifty.” How can that be bad?

If you enjoyed this post you’ll also enjoy Prices – 6 Reasons To Keep Them Up.

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5 Tips for Fast Growth in a Slow Economy

Wednesday, April 25th, 2012

Inc. magazine is packed full of good advice for business owners of all sizes.

An example of the great articles I’ve read in it over the last 10 years is Fast Growth In A Slow Economy from their latest (April) issue.

It focuses on 5 strategies which have transformed the business of the owners who adopted them.

Here they are.

1.    Drop your worst customers

Inc.’s emphasis is on customers who don’t pay on time, but the definition can be broadened.

We include customers who want non-standard products or services; always want a deal on price; leave it to the last minute to order; or are abusive to employees. Some bad customers do all of these

I was interviewed recently by Diane Buckner, of the Dragon’s Den, for her post, Customer from Hell? Don’t be afraid to fire them.  She comes to the same conclusion.

Get rid of the customers who drain your lifeblood.

2.    Get help from your customers

Email or on-line surveys are inexpensive ways to get insight into customers’ thinking and challenges.

In the Inc. article, Barrett Distribution, reported a 30% response rate to their survey. The fact that 56 questions could be completed in 12 minutes helped.

Barrett surveyed half of their customers immediately and half 6 months later. That allowed for quick reaction to the feedback. One opportunity they uncovered meant business with one customer quadrupled – providing, by itself, a decent ROI on the survey.

3.    Act locally, not globally

Pursuing companies with a national brand can appear to be very lucrative. However, it’s easy to find yourself competing hard just to get their attention.

The experience of Door Number 3, an ad agency, can be typical. They pursued national accounts and won fewer and fewer of them. When they examined their business, their best accounts were located in their own area.

It’s easier to build relationships with decision makers in smaller, local accounts. Travel costs are less and you can spend more time with them, getting to really understand their business.

Finally, local companies talk amongst themselves and so there’s more word of mouth promotion and referrals from them.

4.    Treat everyone as a potential employee

Virtual organizations offer many advantages (we run one at ProfitPATH). So I can relate to the consulting company in the Inc. article. The owner, Tom Koulopoulos, needed access to specialist skills to complete bids on RFPs his company had a high odds of winning.

For a number of reasons, he couldn’t add the people he needed as full-time employees. So he forged partnerships with them, exchanging a share of the contract value if they won the RFP.

Since Koulopoulos’ company was the vendor he had to find people whose values were similar to his. The key to his success his use of his network, in many cases people he had known for many years.

5.    Get small to get big (think niche)

The owner of Medisys Health Communications’ breakthrough came when she read Blue Ocean Strategy

She realized that they had to stop trying to be all things to all people, competing with everyone else doing the same, find a niche that no one inhabited – and then own it.

So they focused on something they’d been giving away free for years and ended up collaborating with her previous competitors – doing something none of them can do.

If you enjoyed this post you’ll like 4 Things Every Business Owner Must Think About

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Follow Your Dreams, But Chase The Money

Wednesday, March 23rd, 2011

Our first guest blogger is.………………Jeremy Miller, the President of Sticky Branding — a brand consultancy specialized in building brands that sell themselves online.

The best way to grow profits is to cut your own path. 

You never hear about companies who achieved immense success by doing what everyone else did.  No.  Successful companies challenge the status quo, and create new categories and sub-categories.

Companies that break the mold and create new categories create immense competitive advantage.  You can see these breakout businesses in almost every industry.  Wal-Mart rewrote the business model for discount retailers, and set the standard for big box retailers.  The Chrysler minivan went 16 years without a viable competitor.  And Apple epitomizes the creation of new categories with the iPod, iPhone and iPad – each product causing structural shifts in consumer electronics.

Every business owner has an opportunity to break the mold and find their own path.  It takes vision, commitment and quick reflexes.

New categories aren’t made in a vacuum

Innovative new categories are not created in isolation.  Thousands of brilliant business ideas have died on the vine, because there just wasn’t enough demand for them.  The entrepreneur saw a need that no one else cared about.

Successful companies challenge the status quo.  Steve Jobs said in a Fortune Magazine interview, “When we created the iTunes Music Store, we did that because we thought it would be great to be able to buy music electronically, not because we had plans to redefine the music industry.  I mean, it just seemed like writing on the wall.”

When forming a new category it’s always in comparison to the current alternatives.  Your customers already have solutions for their business challenges; they just might not be the most optimal.  Challenge those solutions head-on, and provide them a better option.

Constantly Tinker

Businesses rarely get it right the first time.  Wal-Mart’s dominance didn’t happen overnight.  It was Sam Walton’s life’s work, and came out of his constant tinkering and risk taking.

Walton was always on the hunt for fresh ideas he could implement in his own stores.  He said, “I probably have traveled and walked into more variety stores than anybody in America.  I am just trying to get ideas, any kind of ideas that will help our company.  Most of us don’t invent ideas.  We take the best ideas from someone else.”

Creating a new category is a work in progress.  It takes a significant commitment of time, resources and energy to give your customers a new alternative.

Nothing relieves pressure like sales

It always boils down to money.  If your customers don’t get it, they won’t pay for it.  Customer feedback is the best feedback.  It will tell you if you’re on the right track or not.

Chances are your first time to market may not be a whopping success.  So persist, tinker, reinvest and continue to push the bar forward.  It’s your vision and dreams that will help you find a new category, but it’s your customers that will form it and make it a reality.  When it does come together you will be on the path to immense profit growth.

For more information on Jeremy Miller and Sticky Branding visit http://www.StickyBranding.com

5 Tips To Improve Margins and the Bottom Line……

Wednesday, May 5th, 2010

Sometimes the old truths are the most important ones. A conversation with a client the other day got me thinking about these simple tips that can pay major dividends.

There are really only 4 ways to increase profits – sell more, improve margins, cut costs or do all three. Costs always have a habit of creeping upwards over time. So, particularly in these economic times, it pays to take a hard look at them and then eliminate the things we can live without. But there’s a limit to the extent to which we can cut costs before we hurt the company’s long term growth potential. To get steady, incremental increases in profit we have to sell more and improve margins.

There are only 2 ways to sell more – add new customers or increase sales to existing customers. In my experience, when we talk about selling more we tend to put the focus on adding new customers. But we know that it costs at least 6 times more to sell to a new customer than to an existing client. That’s not hard to understand when we consider the “acquisition” costs – e.g. advertising, telemarketing, etc.

Tip # 1. Don’t lose your least expensive prospects – existing customers. They must be convinced that we do a great job; otherwise they wouldn’t buy from us. Every business loses some customers over time, but when customers leak away, replacing them with new ones cuts into profits. The key is to focus on our “retention rate”. We need to have a process that alerts us when a customer stops purchasing from us. And we must find out why exactly they’re leaving – not simply make assumptions. Keeping customers satisfied is better for your bottom line than replacing them.

Tip # 2. Remember not all customers are created equal when it comes to profitability. Pareto’s rule tells us that 80% of our profits will come from 20% of our customers. But, how many of us slip into the situation, over time, of treating all customers as equally important? That actually hurts our profits because we waste money using the same marketing and selling techniques on everyone and treat them the same way when they contact us.

So, how do we recognize the 20% of customers who give us 80% of our profits? They are the companies who buy from us regularly and understand the value of what we do for their business. They focus on quality and reliability rather than price and they pay on time. Because they are successful in their field, they have the potential to grow, allowing us to grow with them. They may even refer potential clients to us. These are our “A” customers. Can you identify yours?

Tip # 3. It makes good business sense to treat “A” customers differently than the others. Everyone in the organization should know who they are. So, when they talk to them on the phone or face-to-face, answer their email, make product for them or pick their orders, these “A” clients get the most prompt, attentive, efficient service we can give. We should market differently to them too. Stay closely in touch personally and via email, e.g. send them our newsletters, and develop the relationship by figuring out how we can help them respond to the changes in their industry.

Tip #4. Watch the customers who offer some, but not all, of the benefits of our “A’s” very closely. They still focus on quality and reliability but may not have been around as long as “A’s” and so may not buy as regularly and/or as much. These are our “B” customers, and apart from what they do for our bottom line today, they have the potential to be the “A’s” of the future. Identify them and build a strong relationship with them. They may get fewer face-to-face visits than the “A’s” but they do get regular calls from our internal sales staff – a very effective but much less costly method of maintaining contact. They are also on our email database.

Then there are customers who buy smaller amounts consistently but who have very little potential for further development. These customers – our “C’s” – are solid contributors to the remaining 20% of our profits but the ones who may be most likely to drift away. Our sales and marketing strategies are designed to maintain these relationships in a cost effective way. Primary contact is via regular (but less frequent than for “B” clients) calls from internal sales and email contact about the products or services they buy.

The final group is easy to recognize – they complain most and buy small quantities of our products irregularly. That’s because they are focused on price and discounts. They buy from us only when we’re cheaper than our competitors – they have no loyalty. When they do buy from us, they are abrupt, demanding, they always need delivery immediately and people hate dealing with them. Processing their orders requires our staff to drop everything else and get them to the front of the line. They are our “D” accounts. Dealing with “D’s” can be so disruptive that occasionally they even cause us to make mistakes with the orders for the profitable customers.

Tip # 5. The final tip is to “fire” your “D” accounts. That’s correct, if orders from “D” customers are profitable they’re at the bottom end of the margin scale and the amount of resource required to get them out the door wipes out anything we were going to make. Yet we all have “D” accounts – why don’t we just get rid of them? We don’t have to be rude, simply play them at their own game – quote high prices or long lead times. They’ll make the decision not to deal with us. Do it often enough and they’ll stop calling.

Focus on your “A” and “B” customers and you’ll improve your margins. Match your sales and marketing resources to customer type and get rid of your “D’s” and you’ll improve the bottom line. Make retaining “C’” customers a priority; work hard at turning your “B” accounts into “A’s” and get your sales staff focused on understanding your “A” accounts’ business – then you’ll not only sell more but you’ll make more profitable sales.

Some “oldies” but truly “goldies” in these very difficult times!

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