ASSUMPTIONS BEHIND THE "5-5-5 REPORT"
If you read article # 2.20 title "A Strategic Management time Management Exercise" ./articles/2_20.asp, note point 7 that refers to the 5-5-5 report. The following explains the logic behind this monthly one page branch report.
- If you all will now get paid on exceeding PBIT targets, then management must help to take three categories of customers – core, target and lead2gold – to the next level. Sales reps generally can not do this on their own. There may be rare exceptions.
- The biggest, fastest, easiest source of incremental margin dollars with the highest flow-through to the PBIT line will come from selling more old items to best, most trusting, most open-minded customers on a systematic, larger order size basis. (That’s why we must all super-focus on the top 5 most profitable, core customers within the historic #1 niche of customers at each branch.)
- The biggest, fastest source of operational slack creation needed for re-deployment into taking better care of better customers will come from turning lead accounts into gold. This will answer the "we are too busy putting out today’s fires (minimally as opposed to knowledgeably) to do new stuff that we know we should be doing.
- Even the 2 or 3 out of 10 big losers that won’t work with you will become profitable because you will still have the cherries that they need to pick.
- Longer-term, starting 6 to 9 months out, cracking today and tomorrow’s gazelle accounts will be the biggest source of future profit growth.
QUESTIONS (see the Question Maps* for each category of accounts, then come back to invent your own questions for this section.)
*Questions Maps are:
Exhibit 31 - Map For Thinking About Most Profitable Accounts ./exhibits/Ex31.asp)
Exhibit 32 - Map For Lead to Gold Accounts ./exhibits/Ex32.asp)
Exhibit 33 - Map For Cracking The Right Target Accounts