 Thumbprint Analysis™ can lead some to the inappropriate knee-jerk conclusion that certain types of customers and or products and services should be eliminated. That only works if you are able to discard all the operating costs associated with those customers and or products and services at the same time… that usually is very difficult to do. We have learned from many Thumbprint Analysis™ projects that operating profits can increase by 100% or more by carefully trimming, pruning and managing the basic segments of the business with the new data. The Thumbprint™ could lead to exiting some segments of the business, but most often improvement efforts are a better choice.
Let’s say the Thumbprint™ uncovers a weak segment… maybe it even produces a loss. However, you consider this segment to be important to the business, in that, it is complimentary to other profitable segments. Simply by exposing the segment’s performance… improvement measures are often discussed and implemented. All the new improvement dollars from the segment will flow to the total company profits… even if the segment continues as a “Loss Leader”.
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Knee-Jerk Reaction