LOSS-MAKING SALES IDENTIFICATION FOR A PRINT COMPANY
Loss-making sales identification for a print company
Challenge: Increase revenue and identify loss-making sales for print company
Business type: medium
Printtime sells, supplies, and provides printers and cartridges to small, medium, and large businesses. The company's owner, Angela, was concerned about sales decreasing in the last quarter, even though the same strategy had been successful in previous seasons.

Overall analysis

Angela wanted to identify the problem of sales decrease, so we offered her Prudence Standard package, which includes features such as:

  1. Cash flow forecast
  2. Sales forecast and trend-seasonality decomposition
  3. Price elasticity report
  4. CLTV report (customer lifetime)
  5. Item profitability report
  6. Customer and vendor dependency report.

We were particularly interested in the last two, as they might identify the possible causes of sales decrease:

- item profitability report determines product sales that are profitable or are completely unprofitable. This report also includes stable and variable business costs over a period of time (week, month, year);
- customer and vendor dependency reports help identify buyers who buy little or/and rarely and those who bring good profits to the company.

Financial model analysis with Prudentia

After analysis with Prudentia Standard, Angela discovered what was the real state of her company:

  • new customers tended to pass by or buy little things (it was at the time when competitors announced the release of printers with new features and offered pre-sale at a good price);
  • 30% of customers were buying mostly cartridges, which are the cheapest product on the market among competitors. However, it affected new printer sales badly. The analysis also showed that the cartridge requires more supply expenses than other spare parts and products;
  • the biggest revenue was the printer repair and maintenance for regular customers, but it was rather a seasonal, variable sale. Nevertheless, this is the only profit that was more or less constant in Angela's business.

Solutions

With this data from Prudentia, Angela could decide how to change the sales strategy. So, she launched a new promotion in which new printers were sold with a package of cartridges as a bonus. Regular customers were offered a discount on cartridges with annual free maintenance for their printers.

Three months later, Angela shared the good news - the new strategy increased her profit.
She made a forecast again using Prudentia Light. These are the numbers she obtained:

  • 15% increase sales on new printers,
  • Customers' retention increase by 10%,
  • New clients flow improvement by 13%.
Challenge: Increase revenue and identify loss-making sales for print company
Challenge accepted: sales growth by 15%, customers' retention increase by 10%, new clients flow improvement by 13%
Product: Prudentia Standard
RELATED ARTICLES