From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Are your customers a cost?

Are your customers a cost?

From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Are your customers a cost?

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- Now while we're looking at what to cut I want to say that customers can be a cost as well. I know this sounds counterintuitive but some of your customers are probably loss-making. I've noticed, actually, when I ask people in training courses, do you think you've got any loss making customers, they always go, oh yeah, and they always know who it is as well. So you could do a parito again and just look at your customers. And in fact, if you did that, imagine if you had 80 and 20, so imagine if 80% of your customers were bringing 20% of the profit and 20% of the customers were bringing 80% of the profit. Imagine if you, obviously you've got to look after those top 20% right, but if you look at the other 80% who only bring in 20, do you think they all are equal? And of course, they're not, are they? What you'll find within that 80 is you'll have about 30 who are probably bringing in, let's call it plus 30. And then you'll have another 30 who are probably bringing in zero, they're just…

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