Trimming the Fat:: Customer Spending

Taking away a "precedent" spend is perceived as breaking a promise to a customer. The recession has given further cause to review current customer spending and, yes, take measures to reduce this spend. The key to executing spending cuts is to know when and where to pick your battles.

The above chart is a guideline of what measures you may want to take when trying to trim spending with your customers. Convincing your customer of positive repurcussions to any change is very important in the presentation of your plans. For example: a price increase will mean more generated trade spend/program money that your customer will earn. Eliminating one spend in favour of another that may generate more sales, is a win win for both parties. Any small change or redeployment of spending can become a new way to generate sales if executed well.

To Grow your Business: Pick your "Low Hanging Fruit First"

There are two sound rules of thumb here:

• The 20/80 principle: 20% of your customers will deliver 80% of your sales.
• To grow your sales: target the easiest wins/opportunities first.

This drives my next point. In these lean times when resources are stretched thin, it is important to keep focus on the above when implementing your business plans. Often companies becomes too focused on developing new business. Have you analyzed your current customer business well enough to realize all the growth opportunities you have yet to develop? This chart highlights some thoughts to consider when determining where to direct your sales energy. Ultimately though, keep in mind that if you don't take care of your current customers and show them growth, someone else will.