Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112BUSINESS TIP –––––––––––––––––––––––––––––––––––––––––––––––––––––– MAPEI has used color technol- ogy bundled with artistic knowl- edge to develop a new 40-color palette spread across five color collec- tions, each infused with a distinct per- sonality. The company is the first tile and stone installation systems man- ufacturer to use groups of organized grout colors to help customers make the best choice for the final look of their flooring installations. Each color collection consists of eight shades, arranged by increasing value (from light to dark) and chroma (color satu- ration). The primary objective of the color collections is to facilitate the grout selection pro- cess and appeal to the cus- tomer’s personality and feelings. www.mapei.com not an inconsequential issue. Potentially, dollar profit could be increased by 45% through concerted effort. The immediate, knee-jerk, reaction is to just fire the D customers. In point of fact, this is an approach that some analysts support. It is an approach that should be avoided. Instead, it is essential to break the customer base into three target groups and work with them sys- tematically. Group One – A Customers: In the rush to focus on the money losers, there is a tendency to overlook the most profitable customers in the mix. It is actually more important to support the A accounts than it is to worry about the D ones. No customer set buys all of their needs from one supplier. Anything that can be done to encourage A customers to pur- chase more has a direct and immediate impact on profitability. It is also a positive set of actions that everybody supports. Group Two – The Down and Dirty Two Percent: Anecdotal evidence sug- gests that somewhere around 2% of all customers are not just unprofitable for the distributor, they are highly unprofit- able. Even worse, they probably enjoy being unprofitable. These customers real- ly should be fired. Care must be exercised in the fir- ing. Today’s fired customer may become tomorrow’s acquirer of one of the best A customers. The simplest approach is to simply let them fire themselves. This involves systematically moving them to a different, higher, category on the pricing schedule. GroupThree –The Mass of DAccounts: After the members of Group Two have been eliminated, there remains a massive number of accounts that still produce a gross margin that does not cover the cost to serve them. It is a lot of customers 28 TileLetter | July 2016