Finding Pockets of ProfitabilitySCORE<br />Presented by:<br />Jeanne Rossomme<br />jeanne@RoadMapMarketing.com<br />RoadMa...
Agenda<br />Why should you care?<br />Case Study<br />5 Simple Steps to Create an Accounting Knowledge Center<br />Resourc...
Your feelings about tax prep<br />Copyright 2010 RoadMap Marketing LLC<br />
All Roads Do Not Lead To Profitable Growth<br />All dollars are not green <br />It’s 4x easier to sell to an existing cust...
The Value of Your Customers<br />They cost less.<br />They spend more.<br />They can be your best sales force.<br />They c...
Your accounting system is a gold mine<br />Copyright 2010 RoadMap Marketing LLC<br />
Key Questions you can answer:<br />What market segments or customer groups are most profitable and which are the most pric...
Case Study<br />Copyright 2010 RoadMap Marketing LLC<br />
Profit and Loss Statement<br />Copyright 2010 RoadMap Marketing LLC<br />
Current Situation - Finance<br />Copyright 2010 RoadMap Marketing LLC<br />
Current Situation - Marketing<br />Copyright 2010 RoadMap Marketing LLC<br />
Which Market Segments?<br />Set up “Customer Type” in QuickBooks by Market Segment<br />Copyright 2010 RoadMap Marketing L...
Structure QuickBooks to align expenses with income<br />Copyright 2010 RoadMap Marketing LLC<br />Which Products/Services?...
Which Customers?<br />“Fire” unprofitable customers<br />Link expenses to each client<br />Copyright 2010 RoadMap Marketin...
5 Simple Steps<br />Use Accounting History to Create Meaningful Customer Groups.<br />Start rating and tracking your marke...
Step 1: Use Accounting History to Create Meaningful Customer Groups<br />Copyright 2010 RoadMap Marketing LLC<br />
Step 2: Start rating and tracking your marketing efforts and customer loyalty<br />Copyright 2010 RoadMap Marketing LLC<br />
Step 3: Decide on Product and/or Service Groupings<br />Copyright 2010 RoadMap Marketing LLC<br />
Step 4: Assign direct costs to customers and jobs to track profits<br />Copyright 2010 RoadMap Marketing LLC<br />
Step 5: Use Customer, Product or Service Level Financial Reports<br />Copyright 2010 RoadMap Marketing LLC<br />
Quickbooks Company Snapshot<br />Copyright 2010 RoadMap Marketing LLC<br />
Example of Revised P&L<br />Copyright 2010 RoadMap Marketing LLC<br />
Establish benchmarks<br />Copyright 2010 RoadMap Marketing LLC<br />
Extracting the Gold<br />Copyright 2010 RoadMap Marketing LLC<br /><ul><li>Cut or convert unprofitable products and services
Focus your marketing $ on those segments where you get the most gains
Look at Customer Lifetime value</li></li></ul><li>Copyright 2010 RoadMap Marketing LLC<br />Up-sell, Cross-sell, Re-sell<b...
Up-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
Copyright 2010 RoadMap Marketing LLC<br />Up sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Level o...
Up-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />Definition:  Presenting the customer with more expensive items, upg...
Cross-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
Copyright 2010 RoadMap Marketing LLC<br />Cross-sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Leve...
Cross-sell<br />Definition:  Selling an additional product or service to an existing customer<br />Copyright 2010 RoadMap ...
Re-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
Copyright 2010 RoadMap Marketing LLC<br />Re-Sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Level o...
Re-sell<br />Definition:  structuring sales and offers to encourage and reward repeat or quantity purchases<br /><ul><li>F...
Preferred customer card with regular discounts and offers
Upcoming SlideShare
Loading in …5
×

Pockets of profitability

830 views

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
830
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • The State of Accounting AvoidanceWhat are your feelings when you need to work with your accounting system? Fear? Confusion? Dread? Disinterest? As a result most small business owners invest as little time, money and thought as possible into the accounting function. But we need to get over this angst for som every important reasons
  • The first reason we should care is to step back and think about the simple fact that not all dollars are green! What does that mean? It means that some sales of certain products or to certain customers actually COST us money – meaning they are not profitable. And this is a very common problem. For example a recent survey shows that …
  • Bookkeeping and accounting are generally viewed as “overhead” or non-revenue generating functions. But your accounting data is really the knowledge base of your company – the results of all of your company’s operations (good and bad) show up in the financials. Here you have a gold mine of information on customers, purchase habits and cycles - and the costs associated with delivering value to these customers. If your accounting database is designed properly, you can “drill down” into this untapped reservoir to uncover “pockets of profitability” (aka areas where you should focus your growth efforts). Properly structuring your accounting &amp; financial reporting database can create a real strategic asset for your business.
  • So by looking at our accounting data and structuring it correctly we can answer these important questions with the bottom fact being most glaring.
  • By using the same grouping process as described above for customers, you can identify the groups of products and services to track. Again, it is best to keep it simple at the beginning with no more than 3 – 5 top categories and sub-categories within each group as necessary.
  • Understand customer’s budgets and needs“Expense” is usually gauged with reference to the original product or service.Understand concerns or fears and upsell to address.Incent sales people to upsell.Use an assumptive manner – not pushy or apologetic.Describe benefits and how it addresses their needs.Hands-on demonstration where possible.Package deals on related products.
  • Benefits:Increase incomeProtect the relationshipLeverage sales relationshipReduce finger-pointing
  • Benefits:Increase incomeProtect the relationshipLeverage sales relationshipReduce finger-pointing
  • Pockets of profitability

    1. 1. Finding Pockets of ProfitabilitySCORE<br />Presented by:<br />Jeanne Rossomme<br />jeanne@RoadMapMarketing.com<br />RoadMap Marketing<br />www.RoadMapMarketing.com<br />
    2. 2. Agenda<br />Why should you care?<br />Case Study<br />5 Simple Steps to Create an Accounting Knowledge Center<br />Resources<br />Your Questions<br />Copyright 2010 RoadMap Marketing LLC<br />
    3. 3. Your feelings about tax prep<br />Copyright 2010 RoadMap Marketing LLC<br />
    4. 4. All Roads Do Not Lead To Profitable Growth<br />All dollars are not green <br />It’s 4x easier to sell to an existing customer than to acquire one<br />The 80/20 rule applies to customers and products<br />53% of owners don’t track customer retention<br />81% of owners don’t track profits by markets<br />Most owners don’t track profits by customer or product<br />Source: SunTrust survey of business owners<br />Copyright 2010 RoadMap Marketing LLC<br />
    5. 5. The Value of Your Customers<br />They cost less.<br />They spend more.<br />They can be your best sales force.<br />They can provide new ideas for services and products.<br />They are more profitable.<br />Copyright 2010 RoadMap Marketing LLC<br />A 5% increase in customer retention yields an increase in profits of 25%-100%.<br />
    6. 6. Your accounting system is a gold mine<br />Copyright 2010 RoadMap Marketing LLC<br />
    7. 7. Key Questions you can answer:<br />What market segments or customer groups are most profitable and which are the most price sensitive?<br />Who are your company’s most profitable customers? And which customers actually cost you money?<br />What are your company’s most profitable products and/or services? Which are your loss leaders?<br />Which customers, products and services offer you the greatest future value?<br />Copyright 2010 RoadMap Marketing LLC<br />Studies indicate over 50% of customers do NOT generate sufficient profits to sustain operations.<br />
    8. 8. Case Study<br />Copyright 2010 RoadMap Marketing LLC<br />
    9. 9. Profit and Loss Statement<br />Copyright 2010 RoadMap Marketing LLC<br />
    10. 10. Current Situation - Finance<br />Copyright 2010 RoadMap Marketing LLC<br />
    11. 11. Current Situation - Marketing<br />Copyright 2010 RoadMap Marketing LLC<br />
    12. 12. Which Market Segments?<br />Set up “Customer Type” in QuickBooks by Market Segment<br />Copyright 2010 RoadMap Marketing LLC<br />
    13. 13. Structure QuickBooks to align expenses with income<br />Copyright 2010 RoadMap Marketing LLC<br />Which Products/Services?<br />
    14. 14. Which Customers?<br />“Fire” unprofitable customers<br />Link expenses to each client<br />Copyright 2010 RoadMap Marketing LLC<br />
    15. 15. 5 Simple Steps<br />Use Accounting History to Create Meaningful Customer Groups.<br />Start rating and tracking your marketing efforts and customer loyalty.<br />Decide on Product and/or Service Groupings.<br />Assign direct costs to customers and jobs to track profitability. <br />Use Customer, Product or Service Level Financial Reports To Focus On Pockets of Profitability.<br />Copyright 2010 RoadMap Marketing LLC<br />
    16. 16. Step 1: Use Accounting History to Create Meaningful Customer Groups<br />Copyright 2010 RoadMap Marketing LLC<br />
    17. 17. Step 2: Start rating and tracking your marketing efforts and customer loyalty<br />Copyright 2010 RoadMap Marketing LLC<br />
    18. 18. Step 3: Decide on Product and/or Service Groupings<br />Copyright 2010 RoadMap Marketing LLC<br />
    19. 19. Step 4: Assign direct costs to customers and jobs to track profits<br />Copyright 2010 RoadMap Marketing LLC<br />
    20. 20. Step 5: Use Customer, Product or Service Level Financial Reports<br />Copyright 2010 RoadMap Marketing LLC<br />
    21. 21. Quickbooks Company Snapshot<br />Copyright 2010 RoadMap Marketing LLC<br />
    22. 22. Example of Revised P&L<br />Copyright 2010 RoadMap Marketing LLC<br />
    23. 23. Establish benchmarks<br />Copyright 2010 RoadMap Marketing LLC<br />
    24. 24. Extracting the Gold<br />Copyright 2010 RoadMap Marketing LLC<br /><ul><li>Cut or convert unprofitable products and services
    25. 25. Focus your marketing $ on those segments where you get the most gains
    26. 26. Look at Customer Lifetime value</li></li></ul><li>Copyright 2010 RoadMap Marketing LLC<br />Up-sell, Cross-sell, Re-sell<br />
    27. 27. Up-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
    28. 28. Copyright 2010 RoadMap Marketing LLC<br />Up sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Level of Service<br />Scheduled calls<br />Security software <br />and monitoring<br />On-call<br />Low<br />IT Services<br />Security<br />Service Offering<br />
    29. 29. Up-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />Definition: Presenting the customer with more expensive items, upgrades or add-ons to make a more profitable sale. <br />
    30. 30. Cross-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
    31. 31. Copyright 2010 RoadMap Marketing LLC<br />Cross-sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Level of Service<br />Scheduled calls<br />Security software <br />and monitoring<br />On-call<br />Low<br />IT Services<br />Security<br />Service Offering<br />
    32. 32. Cross-sell<br />Definition: Selling an additional product or service to an existing customer<br />Copyright 2010 RoadMap Marketing LLC<br />
    33. 33. Re-Sell<br />Copyright 2010 RoadMap Marketing LLC<br />
    34. 34. Copyright 2010 RoadMap Marketing LLC<br />Re-Sell<br />Proactive, priority<br />Service<br />High<br />Medium<br />Level of Service<br />Scheduled calls<br />Security software <br />and monitoring<br />On-call<br />Low<br />IT Services<br />Security<br />Service Offering<br />
    35. 35. Re-sell<br />Definition: structuring sales and offers to encourage and reward repeat or quantity purchases<br /><ul><li>Frequent buyer coupons
    36. 36. Preferred customer card with regular discounts and offers
    37. 37. Increased level of personalized customer service
    38. 38. Quantity discounts
    39. 39. Free add-ons (such as shipping, delivery)
    40. 40. Participation in customer council; advance notification of events and new technologies</li></ul>Copyright 2010 RoadMap Marketing LLC<br />
    41. 41. Next Stepswww.RoadMapMarketing.com<br />DIY: Get this presentation, article and worksheet on Pockets of Profitability:<br />under Sign Up for ToolKit<br />and get a SCORE counselor<br />Tools: Dashboards and other<br /> resources.<br />Hands-on Help: References for training and direct assistance<br />Copyright 2010 RoadMap Marketing LLC<br />
    42. 42. Let’s keep up the conversation:<br />RoadMap Marketing blog<br />@RoadMapMarketin<br />RoadMap Marketing<br />Upcoming SCORE webinars:<br />April 22: Low Cost/No Cost Marketing<br />April 29: Savvy Social Media<br />Copyright 2010 RoadMap Marketing LLC<br />Jeanne Rossomme<br />jeanne@RoadMapMarketing.com<br />RoadMap Marketing<br />www.RoadMapMarketing.com<br />(202) 257-0663<br />

    ×