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Profit Plus Consulting Ltd
The Old Granary
Evesham Road
Inkberrow
Worcestershire
WR7 4LJ

T: 0138 679 3837
E: info@profitplusconsulting.com

Improving Customer and Product Profitability

  • Do all your customers receive the same level of service?
  • Are all your customers equally demanding?
  • Do you know the costs to service each customer?
  • Do you know the profitability of each customer below gross margin?
  • Do you receive regular information on customer profitability?
  • Do you fully understand the buying needs and behaviours of your customers?
  • Have you developed strategies for managing different customer groupings?

If the answer to some or all of these questions is no, we believe we can help you add significant value to your business.

Experience shows that for many organisations operating in a business to business environment, less than 50% of customers make a positive profit contribution after deducting the costs to serve. LIneCHart

The worrying thing is that most businesses do not know who their loss making customers are or why their customers are not contributing the profit they need.

Consider the following organisation which had among its customer base two large customers with similar turnover.


Company A was a large single site organisation. Company B had multiple sites, treated as autonomous businesses. Taking the gross margin view the organisation sought to develop more business similar to that of company B.

However, despite their similar sized turnover, the costs of servicing company B (selling and account managing, delivering to, invoicing and debt collecting etc.) significantly outweighed its additional gross margin.

BarChart


Based on this new understanding the company developed a new strategy to working with company B and similar customers.

At ProfitPlus, we have many years of experience in helping organisations to:

  • address profitability management issues
  • better understand the profitability of their products/services and customers
  • identify the key drivers of cost and profit performance
  • develop new customer treatment strategies
  • implement activity based costing and profitability management solutions

For examples of our work in this area, please go to Our Experience.

 
 
 
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