A US economist tours China in the early 80’s. Seeing a canal being dug by an army of workers with shovels, he inquires: “Why not use a bulldozer?’
The Manager snaps back: “Do you want to put these poor workers out of a job!”.
The Economist muses: “Then, give them spoons” (and create more jobs).
The extra Busi-Ness of the spoons idea is laughable. But, the real problem is that the Manager can’t envision what his Unseen, Next, Higher-Level Opportunities are for redeploying slack workers after getting a bulldozer. What are your next-level, value and profit improving opportunities that you are dying to pursue?
How About Whale-Account Audit Calls?
In recent blogs, I’ve cheered: do honcho-led, team audits of Big Accounts. If you have Line-Item Profit Analytics (LIPA), then every customer’s small-dollar picks and orders are easily identified. Consolidate their small-spend activity to lower – hidden, unintentional and unnecessary – soft costs and improve profits: for both parties! And, then win more share of accounts too!
- We are too busy (with minnow accounts) to do proactive, new-value solutions for Whales.
- If we change service/terms for losing Minnows to make them profitable, some will leave (and busy-up your competitors!). Any lost-account, Gross Margin Dollars (GM$s) hits profits now. Your proposed Whale-Gains are in the future and uncertain, because we don’t:
- Really understand LIPA.
- Can’t defend Minnow Management to all who believe all/more customers are good.
- And, we need more courage to try our first-ever Whale Audits.
- And, our folks could be busier now, so any new order’s GM$s will help to cover costs.”
Your Data-Free Beliefs vs. Minnow Math
Do customer profitability analysis. The bottom 50% of your active accounts will generate less than 10% of your GM$s, but consume more than 50% of fulfillment activity costs (plus extra headaches). Do you really want more spoonfuls of GM$s from more minnows with an opportunity cost of getting Dozer Buckets of GM$s from Whales?
Answers to Your Concerns?
- Watch video clips 22- 36 on my YouTube playlist 9 at: https://www.youtube.com/playlist?list=PLYfUC2Vw2s2psBA70D2Ffyr1194EnJ17f 22-32 are about Minnow Solutions. 33-36 are about big whale wins.
- Attend APIC (Advanced Profit Innovation Conference) in Toronto on Sept. 22! Click here to register.
- Read answers to all minnow concerns at: http://merrifieldact2.com/e-book/chapter-five/1-39-objections/
- And, check out tons on LIPA at Waypoint Analytics. And/or request a demo!