WORKSHEET #13: Identifying Reasons for Negative Volatility
Note each instance of the company's Negative Volatility (i.e. Get Out or Decrease Use events) among Core customers, especially among Very Large and Large customers or the largest customers the Company might serve, over the last two to three years.
Document the reasons for each instance of Negative Volatility, as well as the total sales volume lost with each instance.
Total the sales volume lost for each separate reason for Negative Volatility.
Total the sales volume lost in all the instances of the company's Negative Volatility. This total is the base or denominator for the calculations done in the next steps.
Divide the sales volume lost for each reason for Negative Volatility by the total of sales volume lost in all instances of Negative Volatility and convert the fraction into a percentage of the total Negative Volatility.
Rank order, from highest to lowest, the percentages for the reasons for Negative Volatility.
Develop an initial program to address each of the reasons for Negative Volatility by addressing each reason by its order of importance in the previous step.
Refine this initial program by planning implementation of each Performance or Price improvement that produces net value (i.e. value after any price or cost change the customer might face) for the customer, as well as acceptable returns on long term investments by the company.
As a shorter, less comprehensive, alternative to Steps 1 and 2, use the reasons you develop, either for the company or for the industry, in the interviews you conduct of a sample of 25 of the company's largest potential Core customers using Analysis 2 and Analysis 66.