Click for high-resolution version.

Bruce Merrifield, President — Merrifield Consulting

•customer service •WayPoint Analytics •market segmentation •pricing strategies •business math for distribution •LIPA •line-item profit analytics in distribution •eCommerce •activity-based costing •Randy MacLean •customer profitability analysis •Bruce Merrifield •sales strategy •Merrifield Consulting •money-losing customers •strategic profitability analysis •concierge customer service •counter sales •managing profit •analyzing delivery •controlling profits •Business Intelligence

When companies gain the power of Line Item Profit Analytics, (LIPA), many new doors open up. However, many employees are only focused with their silos, in their office, and are too busy to deal with these new opportunities. They will often use their new LIPA power to improve what they're doing in their own field, but they will rarely think beyond that as for how to apply these analytics elsewhere.

Your accounts all have specific needs and desires, and in a perfect world you'd have the infinite pool of money it would take to do so. Instead, you have to figure out which of your customers are really worth the struggle.

You currently are serving accounts that are generating negative net profits. In fact, it's probably that most of your customers are making you little to no money. Most distribution companies are actually being carried on the backs of a few golden child customers, with most profit within the company generated by these 5-10 accounts. With your profit being driven by these few star accounts, they're the ones to really focus on keeping happy.

This is good wisdom to have under your belt for sure, but you can't put it into action yet unless you have the deep dive analytics that can identify what those few star accounts are. And you can't figure that out with spreadsheets and averages, you need a cost to serve (CTS)-focused system like WayPoint that will identify your most valuable players.

Now that these customers are identified, you can offer them whatever special treatment they desire, knowing that their efficient cost structures will keep it profitable to do so. Your other accounts start asking for that same treatment? This opens up a new discussion on how to make those accounts more efficient as well so you can afford to show them the same service excellence.

Audio file: merrifield7-08.mp3