Holding Your Base

Based on Mondays (2MAR09) blog, exactly how does an organization hold it's base?

1.0 Review your current accounts and sort based on the following criteria:
1.1 Highest revenue accounts over the last 12 months (20% that produce 80% of your revenue)
1.2 Highest margin accounts (20% that produce 80% of your margin)

2.0 Build a priority list of the top ten current accounts:
2.1 Accounts listed in both revenue and margin as A accounts
2.2 Accounts just listed in the highest revenue as B accounts
2.3 Accounts just listed in the highest margin as C accounts

3.0 Finalize the Top Ten List:
3.1 Identify core processes used to market, sell, produce, and service these accounts

4.0 Executive to Executive reach out:
4.1 Business owner/top executives preemptively call their peers or the senior level in each account, hopefully this is not your first conversation with them!
4.2 Ask the question "we know the economy is seriously affecting business, we want to improve our offer to you, can we schedule a meeting between our two companies to explore this opportunity?
4.3 Create a cross-company project team to identify areas for improvement

5.0 Look inside (next blog post):

Best Practices for Contracting Economies

Our first series of economic news commentary posted today is a wake-up call for all business owners. Here is our analysis of the current market:

• the Dow is headed down to 4000 (another 2500 points)
  
• the S&P Index is headed to 350 (50% of current value)
  
• unemployment will be close to 10% by the end of the year, 20% by the time the market finally bottoms (another 25% increase this year, 3 X the current rate)
• the contraction could last until 2012
  

What does it mean for your business?

1. All of your energies needs to be directed at holding your base; keeping your best (highest revenue, highest margin) customers.
2. Even if you currently occupy this position, you must become the lowest cost producer in your industry.

Holding Your Base

Your customers are experiencing the same market demands, you need to analyze every component of the relationship to improve the value of your offer. They are already discussing it, imagine the impact of a preemptive call from the owner/executive! Image creating a joint team from both organizations to find a way to help them stay in business, and therefore tell you how to improve your offer. They are going to continue to cut costs, why wait until they call you canceling future business.

Lowest Cost Producer

This doesn't mean the lowest price which is a separate decision. It is about doing it better the first time, doing it faster with fewer steps, and improving your value to enhance their success. If you are actively engaged in holding your base, they will provide you with all the information necessary to do it better, faster, with greater value.

One more thing. If you are really interested in radically changing the business and surviving this ugly economy, one more thought. What if you built an open source company? A company that integrates the process of its suppliers and customers to improve everyone's value.

Checkout our Project 1440 blog for details on this new and intriguing business model.

New Direction, Same Best Practices

Just a quick note to our readers. We have changed the focus of our blog dedicated to misc. ramblings from living in the corporate consulting world. We will continue to skewer stupidity when ever and where ever it is encountered, however dealing with the governments mismanagement of the economy requires we add economic insights to one of our blogs.

The current government induced economic contraction has forced us, like most businesses of our size, to change our focus from growth to survival. It doesn't change our underlying library of best practices, it only changes the application.

We are adding a new economic reporting business unit to provide you with the latest information to save your business, to save everything you have invested to date.

Tomorrow marks our new news unit.

Ciao and keep your head - we will win. Whenever entrepreneurs and government bullies tangle, entrepreneurs win! The reason, if they were as smart and dedicated to preserving wealth, they would not work for government. We can invent and therefore resist faster than they can legislate.