FINANCIAL TACTICS AND SERVICE METRICS TO WIN NET-PROFITABLE CUSTOMERS
Financial KPIs urge: “try harder, be cost efficient”. Good stuff. But, what are your analytics to achieve unique service-value capabilities which win and keep big, targeted, net-profitable accounts that average higher margin dollars per order than their average service-cost per order? And, do they keep and motivate best-service-ethic people to:
- Achieve the service-metric goals for the target accounts?
- Cure root causes for net-unprofitable customers and SKUs?
THEMES BEHIND MY BLOGS?
This note is one of 130 blogs posted at www.merrifieldact2.com. A big underlying theme for these postcards has been “inventing analytics to better measure and manage true causes of Profit-Power”.
I’ve rotated through sub-topics (or lenses) including:
- Finance. What are the dysfunctional financial-management assumptions and blind spots that plague many distributors?
- Profit-Equation Management (or order-size economics). You make money at the line, order and customer level when: Margin Dollars minus Cost-To-Serve Dollars equals Positive Profit Dollars. Most distributors vastly underestimate their losing customers, SKUs, and Sales Territories – all of which have losing Profit Equations. Building a cost-to-serve model is not hard. What is? Giving up old beliefs that all customers and gross-profit dollars are all equally good.
- Customer (and SKU) Profitability Ranking Reports. By creatively focusing on the top/best and bottom/worst 5% of these reports, huge profit improvements are possible.
- Field research to discern next-level, service metrics for most net-profitable customers and customer niches (“nichonomics”). Distributors who do this kill those who don’t.
- High-Performance, Service Cultures to attract, engage, and focus talent needed to turn insights (from topics 2-4) into better service-value and profits.
- Key, defining capabilities that customers reward and no other competitors have. Topics 1-5 create these capabilities which win profitable order-streams from best customers. Then, all financial numbers (which are downstream, aggregated, averaged-out symptoms) improve.
- Envisioning Omnichannel Cloud Commerce circa 2021. Do you have the analytics to inform and enable your digital transformation strategies? Topics 1-6 provide the profits, agility, and confidence to change to win in 2021.
AN E-BOOK OF MY BLOGS?
Would an E-book that re-sorts my blogs into sub-topics with additional comments and discussion questions be useful? If YES, let me know: firstname.lastname@example.org