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Are You Losing Money on Your Biggest Customers? Part III

Part Three of Three Parts: Turning Around Unprofitable Customer

In the third and final part of a three part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy BennettMark Brown, and Jay White discuss turning around unprofitable customers.

Turning around an unprofitable large customer relationship.

Jay: We have some big customers with one of my clients, where we sell them upwards of fifteen or twenty different products. I would say three-quarters of the products that we sell are profitable. So, we’re working with the bottom quarter to begin with. We’ve sent these customers a letter notifying them of a price increase with the understanding we’ll continue the existing price for six months while they find another supplier if they do not want to go with the price increase. In some cases, they take the unprofitable parts elsewhere, but many have accepted the higher price and stayed with us. But, if they take an unprofitable part away, it generally is not that big of a deal as we were losing money on that part to begin with.

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