BUSTING THE SALES TRAP IN STRATEGIC PLANNING
Most senior executives do not realize the strategic potential of increasing customer value. An assessment of more than 400 executives showed more than 70% underestimate the impact of increasing customer value on sales growth
SOLVING THE EBITDA PUZZLE
EBITDA increases need not come from relentless expense reduction. The successful strategy uses customer value to prioritize budgeting because EBITA is strongly driven by customer value.
MYTHICAL NUMBERS ARE SO BIG THAT YOU BELIEVE THEM WITHOUT QUESTION.
In strategy planning, mythical numbers emanate from consulting studies intended to establish broad and eye-popping trends…
WHAT TYPE OF SENIOR EXECUTIVE ARE YOU?
With their inward-looking approach, leadership and board members at Flour may damage long-run performance unless the goal is to explore strategic options. A better way forward for Flour should start with customer value and its drivers to focus the company’s strategy. Customers, after all, are the main sources of cash flow for any company. Cost cutting as a strategy is neither desirable nor likely to be successful.
THE M&A DOGMA IN THE OIL AND GAS INDUSTRY
With their inward-looking approach, leadership and board members at Flour may damage long-run performance unless the goal is to explore strategic options. A better way forward for Flour should start with customer value and its drivers to focus the company’s strategy. Customers, after all, are the main sources of cash flow for any company. Cost cutting as a strategy is neither desirable nor likely to be successful.
FLUOR’S RESTRUCTURING MISSES THE MARK
With their inward-looking approach, leadership and board members at Flour may damage long-run performance unless the goal is to explore strategic options. A better way forward for Flour should start with customer value and its drivers to focus the company’s strategy. Customers, after all, are the main sources of cash flow for any company. Cost cutting as a strategy is neither desirable nor likely to be successful.
SAT scores are a key metric used to assess student and school success. Colleges use SAT scores in their admissions process since they can predict student success in college. Not surprisingly, helping their students to achieve high SAT scores is a key goal of many public schools and school districts in their ongoing attempt to retain students and increase enrollment.
Companies in the oil and gas sector are beginning to feel optimistic in 2018. The average price of crude oil in 2017 was 24.6% higher than it was in 2016 and 2018 seems to be shaping up positively.
With this enthusiasm, companies may wonder what strategies may help them increase sales. One proven strategy would be to focus on increasing customer satisfaction.
To remain profitable, companies must have pricing power. They must have the ability to raise prices while maintaining relatively stable unit sales. And at the 100,000-foot level, where CEOs are looking to examine the financial outcomes of their actions, B2B companies struggle to increase pricing power.
The concept of pricing power is associated with price elasticity, or price sensitivity. The more price-sensitive a consumer, the more negatively the consumer will react to an increase. Companies with higher relative pricing power find customers react less negatively to a price increase. Thus, they are able to maintain stable unit sales when they enact an increase.
All customers are not the same. Some generate only one-time business. Others can help grow a firm organically through repur- chasing, recommending the business to peers, inviting bids on new business, and offering positive word-of mouth. Customers who engage in these behaviors are “multiplier customers”: they help firms multiply their business growth.
Multiplier customers who offer peer recommendations and repeat business are especially critical for industrial business-to-business (B2B) companies that offer specialized products and solutions to meet complex customer needs and for whom the cost of customer acquisition can be high. Without multiplier customers, B2B companies see increased customer acquisition costs, may have lower sales per customer, and fail to deliver the desired financial results.
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