Measuring customers by product sales, volume and prices is key, but are you missing a valuable measure of account profitability by not looking at the cost of servicing customers?
You could have two customers, for example, whose products, volumes and prices are exactly the same, however, one customer is considerably more profitable than the other due to the lower costs of servicing their account: we call this Cost to Serve!
There are many ways you can reduce the costs of servicing a customer, without any reduction to customer satisfaction. For example, if you reduce the number of deliveries from four times a week to twice a week (which may also suit the customer), you halve the cost of delivery, which for a long distance customer could be a significant saving. Even if the benefit is shared with the customer, you can make considerable headway and build stronger customer ties.
We have identified dozens of ways to reduce the Cost to Serve and this training exercise is always well received on our courses given it is eye opening, easy to implement and brings immediate results!
PiP Associates (Profit Improvement Programmes)
Training and development
+44 (0)113 289 2686.
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