These 4 simple tips on how to adjust the way you collect data and communicate within your business could boost your profits.
Reducing your lead times and/ or investing in an ERP solution are major business changes to gain profitability, but read on for some other strategic approaches to increasing those margins.
How to Achieve This
- Measure, Measure, Measure
To increase profit margin, you must be able to measure the performance of your business to identify inefficiencies.
By measuring performance, you’ll have the data you need to make smarter decisions that will drive improvements and growth - just like robotics and automation can increase efficiency in the production process.
Manufacturing data analysis dashboard screen in Sage X3 Manufacturing, click for larger image:
- Up-Sell and Cross-Sell
In general, when you increase the amount you sell to your customer at one time, you'll improve your margins because you'll be increasing the purchase velocity and therefore lowering your cost per sale in terms of overhead burden.
Consider increasing your average unit of sale per customer, up-selling richer offerings or cross-selling complimentary products or services.
- Cut Low-Margin Clients, Products or Services
This point assumes that you have collected accurate data that shows which clients, products or services produce what margins. From these reports you can run a margin analysis of your key products, services or customers to see which are most and least profitable.
Cutting out low-margin assets will result in more time and money which can be invested into higher-producing parts of your business.
- Retention, Retention, Retention
It is also important to encourage all of your clients to keep actively purchasing from you.
Courting your current customers eliminates or greatly reduces the acquisition or marketing cost on later transactions. Study the most common ‘drop points’ in your client's purchase history so that you can strategically reinforce your business system to reduce that attrition.
An ERP solution, such as Sage X3, understands the challenges faced by manufacturing businesses in today’s competitive market. Sage X3 can aid your company by:
- Protecting your business against product recalls
- Improving your decision making for a smarter business strategy
- Allowing you to stay in control of the entire supply chain, no matter how complex.
Wondering how Sage X3 Manufacturing can help you? Take a tour and watch our Test Drive Video!