Analyze Customer Reports for Maximum Profit Potential
Think you have a good handle on your company's profit potential?
See how well you can answer these two questions: What's the "break-even" point for every one of your customers or clients? Do your managers know the status of all business prospects? If you didn't score well, consider taking the following steps:
On a regular basis, review the costs involved in selling to, or servicing, all of your customers. Then, establish a break-even point for each one. You can do the same for large groups of customers in, say, the retail trade.
Upgrade low-volume customers by marketing to them more aggressively. Think about dropping customers who consistently fall short of profitable territory.
List all the jobs that support your sales or service functions. Then, calculate the daily, weekly or monthly cost of each task. That helps you set fees or prices for maximum overall profitability.
Develop a system that keeps tabs on "walk-ins" or potential customers who respond to marketing campaigns. At regular intervals, follow up with phone calls, emails or special offers.
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