Exec Brief #5: Identifying High-Potential Accounts
•profit reports •profit strategy •management strategies •Wholesale Distribution Industry •High Potential Accounts (HPAs) •High Volume Accounts •High Potential Accounts ReportWednesday, March 09, 2016—With WayPoint's new High-Potential Accounts report, Randy MacLean demonstrates how you can change the nature of your profit line by identifying the highly leverage able good and bad accounts.
Initially, you might be driven to get all the business you can. Every account may seem like a good account, but this is not the case. You need the tools to help you recognize which customers are the best to have and which customers are not healthy for your business.
This report also allows you to determine which customers are integral to your cash flow and whether losing them will cost you operating income. You may not be able to "fire" a high-cost customer because you are reliant on their money. If this is the case, you need to reform that customer. There are several strategies that can improve profit, lower expense, and create a better relationship.
Or, if you cannot reform a high-cost customer, you must replace the dollars that customer is bringing in from another source. You need to know which customers have this potential and how much of your operating expenses are drawn from that high-cost customer. The High Potential Accounts report is designed to help the triage process on the accounts that matter most to your business.
By bringing in more high-value accounts, you are free to eliminate unprofitable accounts that are critical to your operating budget. Ideally, you can force these high-cost customers to take their business to your competitors, where they will drain your competition's profits.
Your best accounts are a template for the kind of customers you want. But, you need to be able to distinguish between a big account and a profitable account and they need to have a business-based reason to stick with you. Good accounts can lead to more good accounts and bad accounts – unprofitable accounts – can teach us what to look for in other bad accounts.
When you know your numbers, empower your sales team with those numbers, and provide concierge-level customer service, you will be offering very strong business-based reasons for a company to want to work with you.
For more information about Randy MacLean, visit: www.waypointanalytics.net
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