The 2020 Mid-Year Economic Update_long

Improve Profitability by Changing Anecdote to Data

Salespeople need data to understand where a company does and doesn't make money.

The path to profitability begins with ensuring that salespeople understand where the company does and doesn't make money, according to Steve Deist in 3 Margin Levers of Customer Profitability Analytics. Customer profitability analytics are an effective way to do this – and boost gross and net margins at the same time.

Deist, a partner with Indian River Consulting Group, says salespeople need data to show them which customers are profitable and which aren't.

"When inside sales reps learn that some of their high-maintenance 'star' customers are actually big-time losers, they think differently the next time one of those customers asks for a discount," Deist says. "Replacing anecdote with data can have a profound impact."

Customer profitability data, beyond providing visibility, can be used to drive margin improvements in three broad categories: account profit improvement plans (PIPs); pricing optimization; and services and channel alignment.

Of these three levers, PIPs are the most tactical and offer the lowest risk. Similar to growth targeting, PIPs aim to grow bottom-line contribution dollars rather than top-line revenue dollars. The sales rep reviews the profitability of assigned accounts, identifies a small number of customers that might be good candidates for improvement, sets improvement goals for each and develops action plans to reach the goals.

Read more about becoming profitable in 3 Margin Levers of Customer Profitability Analytics, and look for Part 3 of this series, which will focus on how to use customer profitability analysis to improve your company’s market access, in the March 10 issue.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events


articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.