Be a profit prophet, a margin maven

“Focus on the few things that truly matter, for those that do matter tremendously.”

“Fire your unprofitable customers…compassionately.”

These are a couple of my favorite sayings.

One of my new favorites is to “be unreasonable in your thinking”. That is, look at a situation with fresh, unconventional eyes.

When it comes to profit, there are several ways to do this:

  1. We know that, in most businesses, the bulk of profit is driven by a minority of your customers. That is, applying the 80/20 rule, your best customers are 16X more valuable than the rest.
  2. We often look at individual customers to determine how profitable we are and can be. I have one client that shoots for 50%+ margin per client engagement. While valid, this goal may not be sufficient and could narrow thinking and limit options.
  3. Lastly, as the attached article will show, we can also manufacture profit in different customer segment types.

To support #3 above, the HBR article, There’s Still Profit Potential in Your Low-Profit Customers,reminds us to look at things from multiple angles. If you can bucket a bunch of low profit customers together and find ways to remove cost, you may be able to maintain a high service level yet squeeze more profit from the group.

Micro-segmenting using profit management analytics highlighted in this article could provide you with a renewed cache of profit and cash from seemingly low to no profit customers. The authors provide several clever ideas to find ways to increase profit without having to fire or even ignore these individual customers.

Be Exceptional!

Bill – Certified Growth Coach, Foundations in NeuroLeadership certified, PI Certified Partner, 100COACHES member coach

(; For MA companies ONLY, as an approved Training and Development provider, Catalyst Growth Advisors can offer up to 50% off program fees. Click hereto see if you qualify.

Please click here to download or purchase my book Further, Faster – The Vital Few Steps that Take the Guesswork out of Growth.

Published by Bill Flynn

Gazelles Member Advisor and early stage startup specialist with a proven track record with 16 Boston-based startups (9 to date with 5 successful outcomes, advisor to 7 others); SMB to Fortune 500 companies. 20+ years of Senior Sales, Marketing and GM experience in industries including mobile advertising, security, digital advertising, e-commerce and IT. Core Competencies: Player/Coach, Metrics-driven, Execution-based philosophy, Life-long learner

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