Activate Your 5-Step P.R.O.F.I+T Plan to Beat the Economic Blues
C-suite executives frequently confess to saying “we don’t have the budget for that!” all too often despite working hard. When I ask what their plan is to change that, I hear good intentions to increase revenues and cut costs. So I ask a second question “how’s that been working for you so far?”
Sound familiar? Frustrated? The classic “increase revenues/cut costs” thinking that we’ve all been taught simply isn’t enough anymore. With no other clear alternatives, too many leaders stay stalled and can’t see a way out.
The solution? Implement a proactive profit plan, instead of relying on a reactive P&L which simply relegates profit to being the leftovers of lower-than-expected revenues and higher-than-expected costs. Consider this: savvy entrepreneurs don’t start a business without a Business Plan. Experienced executives don’t run their business without a Strategic Plan. Why do so many leaders try to grow their business without a Profit Plan?
Many different elements must come together to deliver the profit results you’ve been striving for – and with a proactive profit plan you’ll finally sell more of the right products and services… to more of your ideal customers… at prices that reflect the true value of what you do… while eliminating costs that shouldn’t be there in the first place!
Here’s the 5 Step P.R.O.F.I+T Plan to get you there:
P owerful Insights: 3 uncommon yet transformational insights are the catalysts: 1) benchmarking your Return on People, 2) seeing your Who’s Who of Customer Profitability, not from an accounting perspective but from a behavioural perspective that you can impact for results, and 3) understanding your Profitable Customer Ratio, a surprisingly simple way to help your employees behave like owners.
R The 5Rs of Proactive Customer Profitability Management: Knowing Who’s Who and engaging your people is a start. Next you need strategies to achieve transformation, and one of these 5Rs will apply to every single customer in your database: Retain, Ramp Up, Restore to Breakeven or Better, Regain, or Reactivate. You can implement these strategies without additional resources – what one client calls “an infinite ROI”.
O bliterate Operational Sludge: Profit leaks below the gross margin level turn a great year on the top line into not enough to show for it on the bottom line. Conventional cost cutting isn’t enough to see significant, sustainable results, yet 80% of those profit leaks are self-inflicted wounds – meaning you can find and eliminate costs that should never be there in the first place.
F inally Price for Value: Every business leaves money on the table, bends over backwards for customers who may not be worthy, and hesitates to invoke price increases for fear of losing much-needed volume. Your Who’s Who of customer profitability shows exactly where to test price increases with minimal risk – where and how to confidently price for value – and where to maintain the status quo to grow volume.
I innovate for impact: Innovation is the wildcard for profitability, yet very different from capital- and R&D-intensive innovation – which often doesn’t sell! Value-add innovation saves a customer time, saves or makes them money, solves a real problem, creates a feel good, or provides peace of mind – and hit-it-out-of-the-ballpark innovations achieve each of those goals. At each step of your proactive profit plan, opportunities to innovate will become glaringly obvious. Best of all? Many of these are small and subtle, and almost impossible for your competitors to copy-cat!
+ T ransformation Only Happens When You Take Action: Here’s what’s possible when you create and implement a proactive profit plan:
“I recall your seminar as though it was yesterday. Our profit was negative $9,955 per employee… From your presentation, we reset our goals and implemented the plan you outlined. For our year ended December 31, 2014, we achieved $26,671 of profit per employee. This was also the highest profitability level in the organization’s history.”
CFO, Major Building Products Manufacturer
#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day.