The account everyone loves
One of your customers is in the top ten by turnover. The sales team treats them as a priority. But they order three times a week in small drops, always after cut-off, on a run nobody else is on. They take a special price on half the range, raise claims most weeks, and pay at sixty days on thirty day terms.
Another customer, further down the sales list, orders once a week, full pallets, on time, and pays by direct debit. On the sales report, the first one looks better. You have a feeling it is not, but you cannot prove it.
Why the numbers do not show it
Your sales system knows revenue and cost of goods per invoice. The other costs of serving a customer sit elsewhere: delivery runs in the transport planner or on paper, claims in emails, payment behaviour in the accounts system, rep time in calendars. Nothing brings them together, so profitability is judged on gross margin alone.
| Cost | Where the data lives |
|---|---|
| Deliveries and drops | Run sheets or route planner |
| Order size and frequency | Order system |
| Special prices and promotions | Customer price agreements |
| Claims and credits | Accounts system and inbox |
| Payment days | Sales ledger |
| Rep visits | Calendars or CRM |
What you miss without it
Reps chase turnover that does not pay. Minimum order values and delivery charges are set by habit. Good small customers get squeezed while large difficult ones get extra service. When you need to cut a run or change terms, you do it with instinct rather than figures, and the conversations with customers are harder because you cannot show your reasoning.
It also shapes growth in the wrong direction. If the sales team is paid on turnover, they will naturally bring in more of the kind of account that looks big and costs a lot to serve, because nothing tells them otherwise. Over a few years, the customer mix drifts towards work that keeps the vans and the office busy without adding much to the bottom line.
The cost-to-serve view we build
- We pull sales, credits and payment history from your accounts and order systems, and delivery data from your run sheets or route planner.
- With your finance lead, we agree simple cost rules: a cost per drop, per case picked, per claim handled, per day of extra credit, per rep visit. Your figures, not ours.
- The tool calculates, per customer and per month, gross margin minus these costs, and shows the result alongside turnover.
- A dashboard ranks customers and shows which cost drives each one: drop frequency, claims, discounts or late payment.
- Reps and managers can open any account before a review and see the breakdown behind the figure.
The rules are deliberately simple. Their purpose is to rank and explain, not to produce an audited profit figure, and your accountant decides how any of it is used in the books.
What conversations look like afterwards
Account reviews start from the same page. Rather than 'we need to put your prices up', a rep can say 'you are ordering three times a week in small drops; if you moved to two larger orders we could hold this price'. Minimum drop values and delivery charges can be set with evidence. And the sales team can see which kinds of new customer are worth chasing.
Signals that you need this
- You rank customers by turnover only.
- Some big accounts feel hard work but you cannot quantify it.
- Minimum order values have not been reviewed in years.
- Reps are rewarded on sales, not margin after costs.
- You are deciding which delivery runs to keep without customer figures.