24. Understanding customer profitability Typically, 80% of sales and >100% of profit will come from 20% of your customers. But which, and where did they come from ? Average Profit (ÂŁ) 1 2 3 4 5 6 7 8 9 10 100 - 39 32 17 8 3 0 -3 -6 -11 % Contribution to profit % Contribution to profit 10 ÂŁ30 ÂŁ85 10 & 9 ÂŁ49 ÂŁ104 10 to 6 ÂŁ121 ÂŁ176 Decile * Profit Increase Average profit Removing 1 to 10 ÂŁ55 N/A -300 -200 -100 0 100 200 300 400 500 600
Thank you for that kind introduction. Itâs a pleasure to be here and a privilege to be able to meet some many fellow Cumbrian Marketers. My name is Tony Preedy and I joined Lakeland last year as Marketing Director, so Iâm still very much in the early stages of learning the Lakeland business. I will attempt however to share with you a little bit about the Lakeland brand and our approach to doing business. My previous roles were Group Marketing Director for the UK division of Otto UK, the largest Home Shopping company in the world, and prior to the Director of Targeted Marketing at Littlewoods Shop Direct Group, the UKâs largest home Shopping company. I tell you this only so that you know where Iâm coming from. My experience has been in the Home Shopping sector, and has concentrated on Direct Marketing. Much of what I say tonight is going to be concentrated on these areas, but I believe that the issues Iâm going to talk about will matter to all whoâs business is concerned with selling in some form.