Companies need to understand the importance of differing customers who are profitable or could be from others who are time consuming but featured by low results or potential. In other words “To Priorize Clients and so courses of action they demand”.
When talking about processes some people use to think in the organization of machines and blue collars, but some of the most important processes we have to conisder are those related to the Sales Arena and the response we must give depending who customers they are.
Consequently I have a Theory to priorize commercial actions classifying clients according to two variables.
1) Time they require from us and
2) The profitability or potential (in terms of contribuiton margin) they provide.
According to these variables we sould have 4 types of clients in our portfolio.
1) PREMIUM: They provide a high profitability or keep strong potential being Low Time Consuming. It could be cause of we have worked hard the account in the past or simply because of its systematic supply processes. Obviously we have to take care of these clients.
2) TARGET: They provide a high profitabilty or they have a great potential although they require time to be attended. These will be the ones we have to spend the most of our time available. In order to get the new economies of scale they can provide us or to organise processes to minimise complexity, depending if they are potential or current clients.
3) BASE: They are not Highly profitable if we consider them one by one but all together provide us a financial and operational safety base. They purchase in short batches but periodically. They are predictable and controllable. It is more or less easy to forecast with them. They are loyal to the brand and they are Low Time Consuming cause of we keep a long relation for a long time ago. The contact is easy cause of we need one each other.
4) DOGS: They are low profitable or poor potentialy, but they are extremely high time consuming. We need to apply many resources to attend them but results never come. They are our waste.
ALL COMPANIES SHOULD ANALYSE THEIR PORTOFILIOS IN ORDER TO IDENTIFY THEIR DOGS AND TAKE THEM OUT. Time is money and our sales force must focus in real targets maximizing productivity. The Rol of the Sales Manager will be to select the clients according to the prior classification and training his sellers on how to behave facing one type or other.