Persuading customers you can’t afford to lose - part 2
In part 1, we suggested identifying your customers you can’t afford to lose by looking at those with the largest sales. Once you have the list of sales by customers, just ensure these really are the customers you can’t afford to lose.
Specifically, check that big sales = big profits, watch out for number of transactions. Sometimes we have large sales but to generate these sales we have to process many purchase orders or many dispatch notes or many invoices. So, if we have two customers that generate $10 million where one customer needs 10 purchase orders and 10 invoices and the other needs 1 million purchase orders and 1 million invoices, these two accounts generate very different profits.
Without getting too complex, generally the customer with the most transactions will be the less profitable. The main point here is to check that big sales = big profits in your organization. This is very important to check, especially if your organization is growing fast. As sales grow, the complexity from large numbers of transactions can kill your profits from your customers.
Once you know who these critical customers are then ask one simple question. What business results can we help them achieve? This is the only thing that matters. Despite the protests of many in your organization it’s not about products and services. If you want to persuade the customers you can’t afford to lose, then you must help them deliver better business results.