Bruce Merrifield, President — Merrifield Consulting
•competitive strategy •profit strategy •management strategies •distribution industry trends •leadership training
Wednesday, February 21, 2018—Triaging Customers and Setting Priorities to Increase Profit Performance
Randy MacLean, President of WayPoint Analytics, and Bruce Merrifield, Vice President of WayPoint, sit down for a talk about the issues and opportunities, tactics and strategies for increasing profit performance in distribution companies.
One area worth looking at is how you allocate your people resources. Randy and Bruce talk about using your people to focus on the best opportunities and the accounts with the highest profit potential, rather than calling all your customers your best. Many businesses operate under the belief that every customer is good, despite data that a good portion is mediocre, at best.
What is your service strategy?
There can be a real boost to profit performance when you gain a solid service strategy. You don't have a strategy if you say yes to everything, and you have no added value for the customers that matter most.
Instead of reacting with a first come first serve approach and giving everyone the same service, think about proactively building out your service plan so that you can go broader and deeper with your best customers. In addition, figure out who doesn't fit your new service-cost model and provide a base level of service for these customers.
It's important to decide who gets first call on personnel, inventory, and favors. These should be your five or so most profitable customers at each branch, and these customers should be top of mind for your employees.
Also, when you have a service strategy, you don't have to fire customers that are losing you money. Simply lay out the terms you need so that they will be profitable to you. Then, if they choose to leave, it's no problem. Let your competitor have all the money-losing business.
This is why it is essential to understand profit potential and focus on the big clients with excellent service. Don't treat all customers as though they are equal, because they are not.
The best way to be successful is to make sure that you and your people are putting more energy into things that matter the most as opposed to diffusing your energy, time, and talent across everybody equally.
For more information about Bruce Merrifield, visit: www.merrifieldact2.com
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