Manufacturer Achieves 40% Growth after Removing 20% of its Non-Profitable Customers
OPTIMA OFFICE CASE STUDY
A premier fresh and frozen baked goods manufacturer was facing closure after ten years operating Primarily as a commissary for a restaurant company parent.
Optima’s team developed a customer and product profitability matrix with an activity-based costing approach that focused on activities controlled by their customers. Recommendations included implementing variable pricing based on key cost drivers and focusing the client’s sales and marketing efforts on the most profitable customers.
In less than two months, the company removed more than 20% of its non-profitable customers. Revenues did not drop, and the company achieved profitability for the first time. During the next five years, the business achieved a compound annual growth of more than 40% per year
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