Erwin Busselot, Director Business Innovation & Solutions, Ricoh Graphic Communications, Ricoh Europe
Ricoh Europe, London, January 17 2022 －During times of change, businesses need to double down on their best clients by understanding and quantifying their importance. Macro-economic trends affect everyone. The labour market is tight with growing compensation expectations. Inflation is increasing the cost of just about everything, including raw materials for printing like ink and paper.
Knowing who your best clients are and why allows you to focus scarce resources on those that drive revenue and profitability. The notion is hard and counterintuitive for most printers. They want to always say yes to any client request, but it’s a critical way to future proof your business.
Consider these five steps to profit from your data:
- Find your 80/20
The Pareto Rule, named after the Italian economist Vilfredo Pareto, states that 80% of consequences come from 20% of causes. The concept is more commonly known as the 80/20 rule and can be applied to analyse the revenue of your client base. Most of your revenue probably comes from only 20% of your clients. Why, then, are all clients treated the same regarding pricing, customer service, sales efforts, and other resources?
Action: Generate a sales or revenue by client report.
- Where’s the revenue?
Now that you have found the most valuable clients, the vital few or roughly 20%, look at the key sources of revenue. Simply put, what are these clients buying? Look for similarities in the types of products or services that this set of clients purchases. Identify opportunities to sell the most common print products across these clients, especially if they are in similar vertical industries or share common business needs.
Action: Generate a sales/revenue report for each client by product type.
- Where’s the profit?
Are the most popular products profitable? It is time to analyse the revenue versus costs by product type and by client. Looking at the profitability of your top clients and the types of products ordered can provide insights for marketing and sales. Perhaps half of the orders from your most profitable clients are wide format signage. What’s the percentage for the other top clients? If it is lower, then marketing and sales should work to increase wide format signage orders using promotions or bundles. Knowing your most profitable products is the key to focusing your sales efforts.
Action: Generate profitability reports by client and product type.
- Automate the 20%
Decreasing operational costs can also improve profitability. Walk the workflow for your most and least profitable types of applications to document every touchpoint. Can any current tasks be eliminated, improved, or automated to reduce costs? If the costs and profitability cannot be improved for the least profitable jobs, it is time to outsource, increase pricing, or eliminate them from your offerings.
Action: Walk the workflow for the best and least profitable types of print applications.
- Shift the Business
Develop a plan based on this data and analysis to focus on your best clients and most profitable print applications. Resist the bias that the amount of revenue is more important than the quality of revenue, and let the numbers be your guide.
Accurate data is critical for this type of business assessment. Capturing job-related costs using production floor data can help you to create a clear picture of profitability. RICOH SupervisorTM levers a vendor agnostic approach to equip you with organisation-wide visibility to drive strategic business decisions. Integrate RICOH Supervisor with other workflow solutions like RICOH ProcessDirectorTM and ensure consistent information with additional data visibility down to the job and document level. These solutions will further enable you to make sure that you’re growing revenue and profitability. Let the data be your guide to analysing your business for future success!
To learn more join us for the next free live Unravel Your Print Workflow webinar on Thursday January 26, 3pm CET/ 2pm BST. Register here for The Print Ecosystem. Produce and Output. Getting it Done.
Be sure to check out our five part ecosystem series for print service providers and enterprise print rooms for more information on each stage of your print production and contact us if you have any questions.