Choose your customers

customers

The sorts of customers you have play a significant role in defining who you are.

A former client had a customer base that valued the hands on, custom design, and short supply chain they offered on their packaging component  items. That group of clients were not buying the high volume, commoditized products, but far smaller volumes for more specialised and bespoke products.

However, promises of large volumes can be seductive, so in the face of squeezed margins and a flat industry, they broadened their product base to include the low margin high volume items required by the large commodity product suppliers.

The equation was changed, no longer did they enjoy an intimate relationship with their largest customers, being engaged in their businesses at a detailed, technical and developmental level, they were just suppliers who could be replaced with product from China or the US.

The result is a flat revenue line over the last 5 years, with fragile margins despite great success in increasing the productivity of their asset base and employees, and a significant lowering of overheads.

It takes guts and vision to turn a customer away, but it often pays.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
This entry was posted in Change, Customers, Lean, Operations, Sales and tagged , , , , , , , . Bookmark the permalink.

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