Global companies have formal enterprise accounts programs. Distributors typically do not. Deploying a team of specialists (to augment the Rep) on the biggest, 1-5%, profit-potential accounts will yield, however, big profit gains, especially in down economies.
A cumulative, customer-profitability ranking report for distributors reveals stats like the top 40% generate about 150% of the financial statement’s profit total. More sensationally, the top 20% customers yield 140%; top 10, 95%; and, – in one case – the #1 account scored 25% of the peak internal profits.
Protecting the #1 Profit Account?
In the case above, the CEO decided to try an experiment to defend against competitive intrusions. He personally followed his company’s product and paperwork flow through the customer’s internal systems visiting with customer employees along the way. He knew he would find fixable inefficiencies, because:
- No one at either firm had previously analyzed the total process for how the customer – bought, received, stored and consumed – the products. And, inefficiencies grow in between department silos unless someone is measuring and managing the total process.
- And, more specifically, our CEO had customer buying-activity analytics to pre-identify specific items and order-types that were generating high, repetitive, activity-costs involving tiny dollars spent. Consolidating these small-dollar transactions at their root-cause origins would reduce costs for both parties.
He found a surprisingly big list of opportunities as well as more sales-volume potential. He had an improvisational team install fixes at cost of about $10K, which the company ate. Why? The grateful customer doubled their purchases (and profits to the distributor) over the next year.
Formalize This Enterprise Selling Process?
A CEO can make rain with one key account. But, how do you get all profit centers to score with their highest, profit-growth potential accounts? For – most profitable core; most upside target; or biggest losing – accounts, you will need:
- Customer Profitability Analytics with line/SKU level profit detail to zero in on the right accounts with new activity-cost-savings insights. Check out www.WayPointAnalytics.net.
- And: a new, formal, Enterprise Selling Process.
For more on #2, download: “Your New, Enterprise Selling Process”. If you are interested in receiving my forthcoming video-clip series on these slides, please email me at Bruce@Merrifield.com and I’ll add you to the recipient’s list.