There’s Cash Hiding in Your Business

You’re making lots of sales and you’re really busy but there doesn’t seem to be much profit or cash left at the end of the month. This is such a frustrating problem because you’re doing so much hard work yet reaping no rewards for it.

You can probably relate to the story below…

A client we worked with recently had annual sales of over $15million but weren’t making any profit!  They were doing all the hard work – bringing in sales, purchasing and warehousing product, all the administration behind running their business day to day…with absolutely nothing to show for it.  In fact, they were making losses.

Their solution was to work harder and harder trying to drag in more unprofitable sales.  They were demanding more from their sales team but didn’t know what to change to get better performance.

Together, one of the strategies we implemented was 80:20 analysis on their business.  It was a real lightbulb moment. You see, they had 667 account customers in total.  Only 39 customers accounted for a whopping 33% of their turnover and GP dollars.  That’s right just 39 out of 667 (or 5.7%) of their customers were 33% of their business!

Another interesting finding was that many of their smaller clients were actually on better pricing than some of their best customers.  You see these smaller customers were price sensitive and managed to haggle their sales reps down to rock bottom prices.

Once we uncovered these facts, the solution was simple.  

Simple but not easy.  

We changed their pricing structure, started rewarding higher volume clients with the correct pricing while raising prices to the raft of smaller accounts that only buy in small volumes.  

We’ve also put strategies in place to lavish their top 2 tiers of clients with service, leading to increased referrals and repeat business.

These changes added $365k to their bottom line.  

How much money are YOU leaving on the table??

1 Comment

  1. film on 23/11/2020 at 9:16 am

    There is certainly a great deal to know about this topic. Vin Reggie Cimah

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