Numbers
Your busiest customer may be your least profitable
Why we look at margin by customer before anything else, and the three questions that usually follow.
In almost every review, we find a customer who takes a fifth of the team's time and earns a twentieth of the profit. Nobody chose that. It happened one discount and one rush order at a time.
How to find them
Take last year's invoices and the hours each customer took. Rough numbers are enough; the pattern is usually obvious.
What to do next
- Reprice, with a straight conversation about why.
- Change how you serve them, so they cost less to look after.
- Or, rarely, let them go.
Most clients keep nearly all of these customers. They just stop losing money on them.
Celia Moreau
Partner, finance
Celia is a CPA who spent a decade as CFO of a group of healthcare practices. She makes sure every plan we write adds up.
