In this monologue, the speaker revisits a previously introduced 80/20 matrix that aligns a company's top 20 clients with three tiers of product offerings based on profitability. The matrix categorises offerings as (1) loss‑making (negative profitability) where the firm must intervene and persuade customers to switch to sustainable products; (2) a middle mix that is break‑even or modestly profitable, requiring education to move customers toward higher‑margin items; and (3) the top tier – the "heart" of the organization – where the best customers purchase the most profitable products. The speaker stresses that the heart tier deserves concentrated attention, while the other tiers involve difficult conversations or educational efforts to improve profitability.
Chapters
A couple weeks ago, I shared with you a matrix, the 8020 rule. How it applies to not just your clients but also your offering. And you got to understand where the heart is. We're going to go back to it. Got a new graphic, I'm starting from scratch here. And we're just going to look at the client side, your best clients. This is your top 20 clients. These are the ones we want to evaluate and we talked about the offering. Well, these clients can buy any mix of offerings they could buy here, which is your low. Actually not even low. It's your loss offerings. These are the things where you lose money. So it's negative income or negative profitability. When your best customers are buying this, there's an intervention. You gotta tell your customers, we love working with you because you're a great customer. What you're buying is not sustainable for us. We have other offerings and see if you can move them up. This is a real challenge because great customers buying things that you're losing money on may not be a great customer after all. The next scenario, I call this the middle mix. And the middle mix is your offerings here that generate some profitability. Sometimes they're kind of break even. These are. Okay, we have to elevate them up through education. And the highest level is your best products are being bought by your best customers. That's where the money is. This again is the heart of your organization and where you need to love upon these customers. So this one is a real hard conversation with them or yourself. They this one is education up to better offerings. And here is the heart of your organization. We want to concentrate our energy.
