Posted on: Monday, March 11, 2002

60 SECONDS ON BUSINESS
Key elements in improving yield

By Dr. Drake Beil
President, Solutions Inc.

There are three key elements in a yield improvement program. First, you need to focus on getting the right mix of customers and having the choices available for them to spend a few dollars more. Second, you have to conduct and monitor sales training to ensure your people are asking for the business. Third, you want to build performance-based reward and recognition programs. Let's talk about each of these in this and the next few columns.

First, let's look at three types of your customers. The first is your average customer. If you're in the automobile industry, a loyal customer represents a lifetime average revenue of more than $140,000. Your supermarket counts on you for more than $4,400 a year. In banking, the average customer represents more than $80 a year in profits.

A second group of customers spends less than the average, so how do you keep them profitable? Do you have a process in place to attempt to increase their value to your business? If not, this group will continue to drag down your performance.

The third group of customers spends more already and gives you the best yield. These people are mission-critical for your business. What they want and should receive is preferential treatment, best possible pricing, and bonus values. Some can be approached for bundled services and others want to be left alone. Some need a personal touch for their accounts, and others can be handled automatically.

All that needs to be communicated to your front-line people.

Reach Dr. Drake Beil at drake@60secondsonbusiness.