154. Forecast What You Can Control with Best Odds

Forecast the Global-Everything Bubble?

The global economy is slowing down. Do be more cautious with debt and big, long-term investments. Otherwise, focus on the net-profit gains that you can best forecast and control. Take your 5-10 biggest net-profit-upside-potential accounts to the “next-level”.  

Assumptions About Customers:

  • Top 20% customers may yield 80%-plus of your gross profit dollars (Pareto). But, one in five is typically unprofitable. They are big losers due to huge, small-dollar picks, orders, and/or returns.
  • For net-profit rankings: your top 2% will yield 70-90% of operating profit. (All net-profitable accounts – about 20-40% – will yield 120-150% of your financial profits. They pay for both the losing accounts and residual operating profit.)
  • A team effort will always find new, upside possibilities within best 2% accounts.  
  • Another 4% subset of customers are high-growth “gazelles”. They are run by ambitious, innovative leaders and have a tightly focused strategy at which they excel. Gazelle buying needs (and sales) grow 2-4X faster than their peers. As innovators, they are apt to be open to your ideas for replenishment-process improvements. Partner them, and they will grow you for years.
  • Your competitors are not thinking this way. Their reps do what they can. And, those reps won’t be able to (on their own) counter your total-team solutions.   

Action Steps:  

  1. Rank all customers by year-over-year increases-to-decreases in gross profit dollars. (Better by net-profit gains, if you have a cost-to-serve model). The most up and down accounts will shock you.   
  2. Focus first on most-up accounts. Why? Nobody wants to take credit for fumbled, down accounts. And, big-up accounts may be still expanding with unsolved replenishment process needs.
  3. Some accounts will be way up. Are they gazelles? Do more research to create a top-5, gazelle, target list.  
  4. Selling and installing next-level replenishment systems requires honcho-led team selling with three stages. Find new system needs to fill. Co-create and resource them. Then, do ongoing, proactive maintenance. For much more on – “Enterprise Account, Team Selling” – follow the link at the bottom to an appendix of past documents and how-to blogs.   

Will This Work for You?

Certainly! As you and colleagues skim through the appendix material, reasons for why you can’t change will arise. Work through them.  As Henry Ford said: “if you think you can or can’t, you are right.”

CLICK HERE to view the appendix

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