Have you ever held a customer
appreciation sale? You know the one where you put up flags
in your parking lot, send out massive emails to your entire
customer base, maybe invest in a mailer, and give out hot
dogs (and hopefully sell off some dead stock)? These are
really great opportunities to let your customers know just
how much they mean to you. Also I am an advocate for free
hot dogs any time, any day!
 Customers
are very exciting. However, new customers are even more
exciting! Just like a brand new box of crayons they smell so
nice! New customers are teaming with potential and there is
no telling what they might buy or who they will tell how
awesome your company is. New customers are what you as a
business are always hoping for. You can gauge how well your
brand is doing because new customers are signaling continued
or inspired growth!
These businesses are a great opportunity for us to not only
bestow those free hot dogs on, but also form a new
relationship. This is where you, as a company, really shine.
Long after the smoke and grill smells are gone and the dead
stock clearance/customer appreciation sale is over, you are
ready to service your new customer.
If your business has a walk in counter, those guys and gals
are always ready with a smile. They are trained to be filled
with knowledge to help guide our glistening new customer to
exactly what they need. Every time they walk in, you are
ready. Your sales team swarms their purchasing department
with the appropriate sprinkling of visits, lunches, and
maybe even a golf game. When the Holiday’s approach, well we
all know how that goes…baskets, candies, cocktail nights and
more! Having been a purchasing and supply chain professional
in my past life, I always appreciated that time of year!
Pretty soon your new customer is wined and dined and
holiday-basketed all the way back to hot dogs in the parking
lot again. Your inventory investment team drags out pallets
of sale items and the warehouse foreman stokes the grill.
Here comes Joe Customer again ready for a deal and shaking
the hands of those who have kept him coming back for 12
awesome months.
Question number one; do you know what really happened over
the year? Do you feel like you got the most out of your
shiny new customer? In a distributorship we teach our
counter sales team members to treat everyone of your
customers with the same courtesy and high level of
service/labor dollars. After all, this is what keeps the
customers coming back. This service is the face of your
company. This is why your company is considered for big jobs
and major contracts during the year.
Question number two; have you ever truly calculated what
your customer is costing you? If you are shaking your head
at me right now, just give me a few more lines to tell you
why this is so important. After a year, your new customer
falls into one of three categories. We can call it the good,
the ok, and the…not-so-amazing-at-all-ever. (you can call it
what you want).Story
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The Good
This customer pays on time. They order many lines of
merchandise on very few purchase orders. Most of the time
their orders are way over your minimums. They rarely return
or complain.
The Ok
This customer pays pretty well and their orders are pretty
good. Sometimes they order a lot of lines per purchase order
and sometimes, not. They pay most of the time in regular
agreed upon terms, but sometimes, not. They are fairly
consistent with returns and issues and sometimes…well you
get my drift.
The Not-So-Amazing-At-All-Ever
This is the squeaky wheel customer. These are the customers
all your departments know the first and last name of at
least one if not multiple people in their company. This is
the customer that orders many times a day with one or two
line items per purchase order, and usually way below the
minimum order dollar amount. This is the customer that gets
a triple count before their order is taped up. This is the
customer that has a special place in the hearts of your
accounting team who may call or send collection letters to
multiple times a year. Check with your sales team, this may
also be your most called on and gushed over customer.
You might be saying, “Danah, this is impossible, all my
customers are amazing, money is money.” My questions back to
you are, really? Have you run a customer profitability
report? Does your software even have this report? The answer
is more than likely.
Once you run this report you may, as my boss says, want to
title it the “Antacid Report”. The reason is because the
names at the bottom of the report may be the very customers
you did not expect. After running this report three times,
getting the same results, and using words that make you glad
you have a door on your office, it will be time to take
action.
First decide where your pain point is. You will need to draw
a line in the sand. Regardless of your actions, not every
customer will become a profitable customer, but they have
value by helping you purchase in volume. Maybe there is a
way to make the customers on the middle of your list lose
less of your money. The top tier customers really need to be
made to feel that they are fantabulous and made to never
want to leave you ever - EVER.
The very bottom portion of the list needs to be considered
for a few options. One of the best ways is firing (no, do
not rip off the bottom portion of the list and light it on
fire over a trashcan). The best way to do this is not to
quit serving them, but to serve them less. One way to do
this is to educate your employees by flagging certain
accounts in your software. Another way, don’t pay
commissions on the bottom of this list. Make sure your sales
force is spending your money wisely and sending all those
Holiday baskets to the right people. (email me for my
address…just kidding)
So I leave you with a question: what do you do to get the
best out of your customers?
Email me and
let me know. I am very interested! If you have any questions
on how, why, or when to run this report, just ask! Happy
Grilling!
About the Author: Danah Head is an Executive Advisor
for The Distribution Team, a firm that specializes in
helping distributors become more profitable through
strategic planning and operating efficiencies. Danah has an
MBA in Technology Management for Supply Chain and completed
work for a Masters in Adult Education and Corporate
Training. While pursuing education, she worked in different
purchasing and supply chain roles within the manufacturing
industry. With real world experience and technical training
help her find the best solutions for warehouse and
distribution companies. One way she does this is via a
Business Reality 101 simulation game designed to dispel
common business misunderstandings for the whole company! For
more information, call (918) 992-5022 or e-mail
danah@distributionteam.com. Also be sure to visit The
Distribution Team online
www.thedistributionteam.com.
Now:
@Distribution_Tm on Twitter
YouTube:
https://bit.ly/1SguYAD
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