In a previous article, "Optimize profitibilty by managing value", I discussed the use of an application called ProfitFinder which allows you to analyze net profit by product AND customer along your value chains. This is an unique innovation around how profitibility is tracked and measured, that allows businesses to look at how value really can be managed to increase company net profit.
These would be the benefits of having this information at your fingertips:
- Customers Net Profit – compare to today’s Gross Margin – you can then focus resources on more profitable customers and their buying patterns and manage the less profitable customers.
- Customer / prospect costs – you can adjust the amount of sales activities and decide when to stop working on prospects when target marketing costs are reached.
- Resource capacity utilization – giving you the capability to do marginal marketing to maximize utilization of your resources to lower the fixed costs and increase total profit.
- Sales force effectiveness - track net profitability by sales person. This information allows you to better set sales targets based on profit, as well as allows you to manage sales accounts more effectively.
- Supporting departments costs per Value Chain – the ability to adjust the different departments costs involved in the value chains related to the profit that the respective VC brings in.
- Decision-making information by Value Chain from products/services/procurement through inventory/warehousing to customers/ markets, on a real-time basis or in batches on order.
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