Is It Time to Focus on Profit Instead of Turnover?
The following post was originally published by Printing Impressions. To read more of their content, subscribe to their newsletter, Today on PIWorld.
Losing a major client could be the best thing that ever happens to you
One of my mentoring clients lost a major client just before they started working with me. The loss forced them to downsize the business. Turnover was severely reduced.
However, when my client reviewed the business figures, it turned out that they were actually making more money than before. The focus on expansion and turnover had led him to concentrate on turnover. It turned out that might not have been the best strategy.
Maybe it’s time to focus on profitable clients
What would your business look like if you produced less work but if more of that work was at a higher profit margin? Naturally, you may still need volume to fill your machines and pay for them. However, it is important to make scheduling space for more profitable work as well. This can make a big difference to many companies’ results.
One result of this is that you may not need as much resource in customer service and in production. The overheads can look very different.
Here’s how one print company has created a profit-first business plan
It has just invested in a new press. It has more capacity. But it has worked out exactly how much volume, low margin work it needs to pay for the press. It has set a rule that there is a strict limit on the amount of work he accepts at low margins. Once it has this much work then it only accepts production at a much higher margin, even if it means the press is sometimes idle.
It has completely changed the focus of sales efforts. The team is now looking for a very different type of customer. It will change the profit margin of the company drastically.
What does your profit plan look like?
Take some time to review the figures. Would you be better off firing your worst customers (or raising their prices)? Are you focusing on the right type of work?
PS - How do you create a sales plan that concentrates on more profitable clients?
Check out “How To Succeed At Print Sales” where I give you step by step instructions on how to create a 12-week sales project. It can be the focus a sales person needs to bring in more profitable clients. Find out more here: https://profitableprintrelationships.com/online-training-resources/how-to-succeed-at-print-sales/
Also, find out more ideas on how to engage with today’s buyers: download my free e-book “Ten Common Print Selling Errors and What To Do About Them” right now at http://profitableprintrelationships.com/e-book/ You’ll also receive my regular “Views from the print buyer” bulletin, full of ideas on how to sell print effectively
Many printing companies are frustrated how hard it is to engage buyers in today’s world. That’s where Matthew Parker can help. He is a gamekeeper turned poacher. Parker has bought print for more than 20 years and received over 1,400 print sales pitches. He now uses his buyer’s point of view to give practical advice to printers. He helps them engage with prospects and customers to create profitable relationships.
Download his free e-book, "Ten Common Print Selling Errors And What To Do About Them" and check out his recently launched book, "How To Succeed At Print Sales: Setting targets, planning the right activities and making sure goals are met."