I echo the prior comment from PACE's Executive Director Raef Lawson thanking Dean Sorensen for starting this PACE Interest Group. I look forward to stimulating discussions.
One topic that always interests me is measuring and managing customer profitability. Very few CFOs make the effort to report a profit and loss (P&L) statement for each customer. The Sales and Marketing teams need this information so they can answer "Which types of customers are attractive to retain, grow, and win back ... and which types are not?"
Mew Member Mac here. Back in the day I created a Customer Profitability scorecard that classified all of our customers according to gross margin contribution and return on invested capital.
We used this scorecard to determine which which customers qualified for various pricing tiers. So, for instance, high performing accounts were eligible for better pricing terms, while lower performing account we challenged to either expand their assortment, take price increases, or make adjustment to the level of service.
The scorecard became a key element of sales rep performance assessments and one-on-one discussions with sales leaders. We rolled up the KPIs for territories and groups, so if the territory was acheiving aggregate targets they would get lattitude on managing individual accounts. But if they were underperforming in aggregate then they had less discression. In over a 2 year period we transformed our business with this approach, substantially improving Customer profitability and ROIC. Furthermore, we virtually eliminated negative contribution customers. Attaching a results report from that program.