Customers are not always right, in fact some are not worth having. Some customers need to be fired! The low margin or zero margin customer costs the organization money in many different ways, not the least of which is sales time spent by the DSR pursuing unprofitable sales and /or providing disproportionate service. While the DSR is wasting time hanging on to and servicing these low margin accounts he or she is not developing more profitable existing accounts or selling to lucrative new business. Further, the DSR is leaving the field open to competitors, who are free to service their accounts unchallenged and penetrate your most profitable accounts. While upgrading low margin accounts is certainly the solution of choice, when all else fails the DSR must consider "firing customers."

Areas discussed:

• Clearly understand the value of our selling time.
• Understand the impact of maintaining Low Volume/Low Margin accounts.
• Understand the impact of acceptable margins and volumes on sales time.
• Identify competitive impact of Low Volume/Low Margin accounts.
• Building volume and margins within Low Volume/Low Margin accounts.
• Develop a plan to replace or upgrade Low Volume/Low Margin accounts.

TRAINING AREAS:

Awareness

1. Exercise: develop a clear understanding of the value of our selling time:
1. establish relationship between monthly sales and hours spent with customers
   
2. establish actual value of selling hours
2. Exercise on Value of Customers:
1. High Volume/High Margin
2. High Volume/Low Margin
3. Low Volume/High Margin
4. Low Volume/Low Margin
3. Identify impact of value of individual customers

Strategy

1. Exercise: identify acceptable profitability margins, by statistical graphing, based on:
1. by sales volume
2. by margin
3. by profit dollars
2. Exercise: identify strategies for handling Low Volume/Low Margin accounts
1. upgrade the account volume
2. upgrade the account margin
3. "fire" the account
4. trade the account with another sales representative
3. Identify impact on competitors as they pick up Low Volume/Low Margin accounts
4. Identify impact on corporate sales as the DSR earns more HV/HM accounts
5. Identify impact on DSR income

Tactics

1. Exercise: Identify specific Low Volume/Low Margin accounts
2. Identify the cost of maintaining these accounts
3. Develop tactics for dealing with these accounts, raise volume/raise margins etc.
4. Develop plan for replacing the accounts that need to be replaced

Action Plan

1. Exercise: Each DSR develop a list of five priority accounts to upgrade or purge
2. Project replacements for each of these accounts as the plan progresses
3. Develop plan to keep five working accounts always being upgraded or purged
4. Exercise: Identify potential impact on sales income
5. Discuss follow-up plan with managers