Page 165 - SKU-000506274_TEXT.indd

n How can we reduce the gap between spending and collecting?
– Can we use our creditors’ money for a little longer without
damaging our creditworthiness?
– Can we sell and make rather than make and sell?
– How can we maintain service levels by reducing stocks and
inventories?

n What level of service do our customers really want?
– Are we offering far more than the market wants or expects?

n Are those customers who demand the highest levels of service
worth the cost of serving them?

n How do we stack up against the competition?

Profit and loss

A brief reminder if I may: profit is an essential prerequisite to staying in
business. It should not be over-exploited at the risk of destroying competi-
tiveness, but the businessperson should always be considering how to
make more money without hurting the potential of the business. Produc-
tivity is vital to business and national economic success. By making
more to sell at lower cost, profits can be increased. Profits provide not
only the “wages” of the providers of capital, they create the reserves
that fund future growth. Profits keep people in jobs, provide for our retire-
ment and help to swell the national treasure chest to provide public
services.

n How can we increase profits without increasing the prices to our
customers?
– How can we reduce the cost of making our product or of
delivering our service?
– How can we increase productivity?
– How can we reduce the cost of making the sale?

n Should we consider something new such as affinity marketing?
(See my Big Book of E-Commerce Answers for details.)

n Should we reconsider our pricing policy?
n How do we ensure the loyalty of our worthwhile customers?
n How do we make our valued customers into advocates for our

business?
n How do we win the most worthwhile customers from our

competitors?
n How do we build customer loyalty? (Research by Bain and

Company clearly shows that the loyal customer is the most

134 Key management questions