This small plastics manufacturer is recognized for quality and on-time delivery, yet new and repeat sales to existing customers (highly profitable) were relatively flat and gross profit margins were declining.
To generate new sales and repeat business through existing customers and improve gross profit margins.
- Analyzed estimated versus actual costs for materials and labor hours for past jobs to identify gaps and improve quote assumptions and realized profit margins.
- Streamlined and systematized purchasing of raw materials; established multiple suppliers in all key areas.
- Refocused sales efforts on ideal target customers, higher margin products and repeat orders from existing customers.
- Developed and implemented an account management process for all existing customers; monitored sales by customer on a monthly basis.
Within 6 months, material costs were reduced by 17% and profit increased 26% without any additional spending on marketing and lead generation. Revenue from existing customers increased 22% versus prior year. By year-end, net profit margins were 2 times the industry average.
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