"A customer is worth as much as we earned thanks to him, and not as much as the money he left with us.’’
Advertising, media and marketing companies are well familiar with this statement. A minor contract is often a very prestigious one and it is thanks to this contract that a company wins a lot of other orders. Sometimes it is the other way round - a company receives great revenue from a contract, but the customer demands more and more improvements. Thus, the employees are practically working only on this particular contract. Moreover, the customer informs all the others in the market that the company is unreliable. How to prevent it ?

Problem: obtaining information concerning the profitability of a contract

Example: A year ago Agencja PR-RWE won a major contract with one of the well-known international corporations entering the Polish market. As specified in the contract, the time has come to renegotiate it. The President of the Management Board of RWE is glad that his company has managed to satisfy the expectations set up by such a large customer. However, somewhere inside, he feels that the time spent on working on this contract negatively influences the time devoted to other customers. The worrying thing is that it is in no way reasonable in terms of the budgeted expenses. Moreover, in the PR industry a lot of costs are not directly related to the sale invoices. Then, should RWE rescind the contract or fight for increasing the budget ? The latter seems more reasonable, but how to do that if it is not known what the actual costs of processing the contract are ?

Solution: SAP Business One has got a lot of features specially designed for companies operating within the project framework. One of them is the capability of providing each expense and sale invoice with the information specifying which project it is related to. For example, an invoice for dinner with a journalist from a periodical informing about events from the alcohol industry will have additional information concerning the name of the contract concluded with an alcohol supplier. Similarly, a sale invoice for a customer for whom we are working on a few projects at the same time (e.g. the company image, the launch of a new product) will also contain the information on the name of a related project. Thanks to adding the information specifying the division into projects to the payroll, the company has an instant access to the information on the profitability of all the contracts signed.

Problem: The customer is not profitable but it happens that it is thanks to his references that we sold our services

Example: RWE works for AKA – a midsize cosmetics supplier. AKA has got two important features: firstly, the company has got a small but fixed budget for PR; secondly, the AKA owner is a famous and respectable person in the whole industry. Commercial Manager of RWE likes this customer very much knowing that in a lot of cases the AKA’s references contributed to the success of RWE. However, Finance Manager would rather get rid of that customer being aware that the profitability of the contracts signed with him is much lower in comparison with other customers. It is up to the President of the Management Board of RWE to decide whom to trust – the seller and his experience or the financier and his figures ?

Solution: SAP Business One has got a developed section related to the relationships with customers (CRM). In such a module it is possible to enter any information on the client which is not directly related to the trade documents, assign tasks to employees and control their fulfillment. It is also possible to enter the data on the source from which the customer is acquired. As far as RWE is concerned, while making a decision it would be advisable to enter any information on the customers acquired thanks to the AKA’s support or references. In this way, it is possible to make an informed decision based on a full lost benefits analysis.
Additional advantage: CRM module and the source of acquiring a customer may also be used for the analysis of the profitability of the company’s own marketing operations– participation in the trade fairs, industry events, advertisements, etc.