Increase Profits by Eliminating Low Performers
Visual analytics is a great way to uncover insights in complex financial data while highlighting opportunities for improvements.
A quick way to visualize profitability is by using the Client Profitability chart. This chart quickly highlights and orders clients by margin as well as contribution to total profits. The chart clearly shows the unprofitable clients and also shows what the profit would be if low performing clients were eliminated.
The second chart, the Profitability Pareto, highlights the percentage profitability improvement that could be achieved by eliminating the low margin clients. It also shows what percentage of customers generate the majority of the profits.
The two together emphasize some immediate action items, such as determining:
- What are the key characteristics of our best and worst performing clients?
- Is it pricing? Sales volume? Direct costs? Labor and overhead?
- What can we do to mimic our highest performing clients?
- What can we do to either improve or eliminate our lowest performing clients?
With visual analytics, the clarity achieved allows for decisive action that can quickly generate profit improvement.