Not every customer you land is profitable, and figuring out which ones are a drain on your organization’s resources is critical. Earning a new customer is expensive (especially in the Business-to-Business world): Your sales team invests a lot of time and resources, and several other departments support various tasks like negotiations, proposal design and, even the office celebration once the contract is signed.
We accept that most new customers are not profitable right off the bat. Some customer engagements, however, may start off well but turn into situations that cost your business money or become a drain on your employees’ time and energy. You may be tempted to “fire” the customer. When it is all About the Money For such customers, it’s time to tally up your losses and evaluate your customer strategy:
- Determine what revenues you get from that organization or person.
- Run a customer-specific report using your accounting software and expense management software?to see how much your company has spent on the customer. Your expense report management software should be able to deliver you a report by the client in seconds.
- Evaluate the possibility that your team will be able to close additional business with the customer, and the net-present-value of what that might be worth.
- Decide if keeping your team engaged with the customer is worth those potential revenues.
You must add ALL the expenses your employees incur that can be attributed to that customer. Organizations without the fast analytics of expense report software and other accounting software tools can miscalculate Customer ROI and keep a customer on the books who may really need to “encouraged” to transfer to a competitor!
Our mission at SutiExpense is to make your employee?s lives more productive (and profitable!), one customer ROI calculation at a time. Use our customizable reporting features to get an accurate and detailed report on how much your employees have invested in a particular client. Having this information will greatly increase the data that you will use to make your decision. Do you calculate ROI at the customer level? How accurate do you think your analytics are? Are you already included employee-specific data in that calculation? Let us know how you figure out whether you ever need to “fire a customer.”