How a Private Equity Firm Saved an Easy $6M
Customer Line Simplification, Explained
In this micro-session, Anthony Bahr and Sean Curran show you how a private-equity-backed company added 300 BPS to operating income in less than three months by, essentially, firing some of their customers.
Firing anyone is difficult (employees or customers) because relationships are inherently emotional and our judgment can easily be clouded.
One of the most impactful 80/20 tools we have is called Customer Line Simplification, or CLS. It’s basically a process for detangling the complex web of customer relationships so we can decide which customers we want to keep and which ones we want to fire.
This idea of CLS is always something that gets jaws to drop at first because the notion of firing a customer is so counterintuitive to how many businesses operate. The general consensus is that every sale is a good sale and that every customer is a good customer. But, if you dig into your data, you’ll quickly see that is not the case.
In fact, you likely have many customers that are costing you more to serve than the revenue they generate
Watch the Short Video:
80/20 gives you a data-based perspective to view firing your customers as a necessary and healthy way to over-serve your best customers.
There is a right way and a wrong way to do 80/20. The art of implementation is what the practitioners at Strategex have built over their tenure as executives. We would love the opportunity to see how 80/20 may help your business. Please reach out to us if you have any questions.