Profit improvement plans offer a low-risk and tactical way to quickly implement customer-specific pricing improvements, says Steve Deist in 3 Margin Levers of Customer Profitability Analytics.
Implementing this process is similar to growth targeting, "but the goal is to grow bottom-line contribution dollars rather than top-line revenue dollars," Deist says. "The objective is dollar improvement, not percentage improvement."
To effectively implement a PIP, each sales rep should first identify a set of target accounts that are good candidates for profit improvement, then set goals and develop action plans for each account while also looking for "errors or inconsistencies in pricing matrices or contracts used for the customer," Deist says.
Looking at specific accounts can help the sales reps make individual adjustments to their selling tactics, while also determining if spending extra time on these accounts is worthwhile.
Read more about how to effectively make pricing improvements in 3 Margin Levers of Customer Profitability Analytics.