Is your top customer sinking your profits?

By geeni_admin | 23 Feb 2022
Is your top customer sinking your profits?

It’s a common pitfall when it comes to renewing the top customer contract, no one has any real idea how much money you make or lose on it. Operations may see unnecessary call-outs, a high cost of service, minimal parts mark-up and low rates for off-contract work. Whereas Management may just see the sales revenue and kudos of the big name you can mention to other prospects to help win more work. How do you get a better result? and What do you actually want?


In most cases you want to retain the customer and deliver the work at a healthy profit – sounds too good to be true.


What’s missing here is data, big data, management information (MI) – whatever you want to call it; without information you can trust to help you make decisions and take action, then you are stuck.

Meaningful MI that captures the good stuff, chargeable visits, and the bad stuff, cancelled / repeat call outs and travel time is the only way to understand the true cost of service and most importantly to work out how to be more effective. If you have the data, you can show it to your customer and work collaboratively to reduce waste. This approach makes you more valuable to them, you are proactively helping them, and you are much more likely to retain a loyal profitable customer.


However, none of this works if your software doesn’t capture the right stuff or provide meaningful information.

Because data can get too big (hence the awful and meaningless term ‘big data’). Information not ‘data sets’ is what Managers need; Sales so they can have important customer conversations and Service so they can improve back-end operations.


If you think your top customers are sinking your margins your starting point is knowing this rather than it just being a hunch, with the correct management information you can pin-point the reasons and work with your customer to make improvements that are better for their service experience and customer satisfaction and better for your margins. In the worst case, you will be able to put in a more realistic price so you stand a chance of making money, or if you want to retain the customer at all costs for the prestige, at least you know the cost of that prestige. Be clear about what you want, and you will give yourself the best chance of retaining a profitable contract and creating a loyal customer.

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