Kevin SimpsonCPA Web Books · Founder at CPA Web Books

Focus on the heart of your organization

29 May 2025 · 1 min

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1:29

In this presentation, the speaker revisits the 80/20 rule and introduces a profitability matrix that aligns a company's top 20 clients with its product offerings. The matrix categorizes offerings into three tiers: loss-making (negative profitability), middle‑mix (break‑even or modest profit), and high‑profit (the organization’s "heart"). For each tier, the speaker outlines specific actions: intervene with top customers buying loss‑making products and guide them toward sustainable offerings; educate customers in the middle mix to upgrade to more profitable options; and concentrate resources on the ideal scenario where the best customers purchase the best, most profitable products. The talk emphasizes the importance of hard conversations, customer education, and strategic focus on the core profitable relationship between top clients and flagship offerings.

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 got to 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. 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.