Do you know the true value of your top customers?
|A.||No, we don’t.|
|B.||We can identify our top customers … just about.|
|C.||We know the turnover value of our top customers.|
|D.||We know the turnover value of our top customers and whether sales to them are increasing or declining.|
|E.||We know the turnover value and profitability of our top customers and whether sales to them are increasing or declining.|
|[Score: A=0, B=1, C=2, D=3 and E=4]|
Why is this question important?
- What are the total sales for each of your top 5 / 10 customers?
- Are sales for each of your top 5 / 10 customers increasing or declining?
- What is the profitability of each of your top 5 / 10 customers?
Remember sales are not the same thing as profit – you may have a very low margin with a key customer and in fact could well generate more ‘bottom-line’ with another customer with considerably lower turnover.
Hence the phrase – ‘top-line vanity (sales), bottom-line sanity (profit)’