• Profitability
  • Behavior
  • Metrics
  • Strategy

Since the mid 1990's we have helped leading companies around the world define, develop and implement Customer Profitability analytics capabilities. We have deep experience in the theory and practice of Customer Profitability measurement and management practice. Our thought leadership has been recognized through publications in authoritative journals, and delivery of plenary sessions at National and International level conferences throughout the Americas.  

Customer profitability measurements come in many forms - ranging from marginal contribution to fully loaded return on capital. Do you need to measure customer lifetime value, current profitability, historical averages or some other basis ? Should you implement using standard, historical or current activity based costs ? What should you do if some pieces of the model are "missing" from your data today ?

We have deep experience guiding you to the right choice of measurement strategy for your business considering factors such as business strategy, competitive and regulatory environment, and the current state of your internal systems, data and technology infrastructure.

We also know how to apply customer value metrics to your clients to add a new and powerful dimension to your understanding of customer relationships and develop appropriate management strategies for the growth, retention and acquisition of your customer base.

Our services in this area include the following:

  • Defining customer profitability model strategy
  • Defining and documenting customer profitability system requirements
  • Architecture & Logical design of customer profitability analysis applications
  • Implementation management

 

Essential to development of real customer relationships is an understanding of how your customers interact with your company. Many organizations are now integrating information from "touch points" across their distribution channels under the umbrella of a Multichannel strategy.

This is a great step forward in managing dialogue continuity especially in the area of customer experience. What it lacks, however, is any insight into the nature of the relationship your customers have with your business and how those relationships change over time.

One of the great insights in the loyalty space is that there is a difference between emotional loyalty and behavioral loyalty. Behavioral loyalty is what your customers actually do... and this is what ultimately turns into results for you. We have focused a great deal of energy into developing insights into customer behavior that are observable - and have developed some unique services as a result.

We are the only management consultants who have taken on product substitution and cannibalization analysis as a distinct discipline. We believe that you can learn a great deal about your value propositions and customer relationships by observing how customers use your products and change their usage patterns over time. We use proprietary analytical tools to identify product substitution and cannibalization efficiently, effectively and accurately.

If your industry offers multiple products that are easily substituted by customer choice - like banking, telephone services, retail products - then you may benefit greatly from the insights we can provide into your customer behaviors.

We believe that people do what they are compensated to do as a basic rule. Many organizations reward behaviors that are easy to measure rather than those that create value. For example, many companies reward their sales force for new accounts opened and volume in new accounts without regard for the effects of cannibalization that amount to as much as 30% of sales in some industries.

It is imperative to measure the right things as the underpinning of your performance management and compensation programs. It is equally important that your compensation structures include sensitivity to the profitability dynamics of your business at the customer and account level. For example we we redesigned the salaries, tiers and floors of an investment management sales force commission program at a national Trust company with this in mind and increased the annual ROI of the sales force to $17 million from a $ 7 million negative ROI in just one year.

Know what to measure. Integrate it into your compensation program. If you need expertise to get you on the right track we'd be delighted to help you.

Most big firms offer Business Analytics Strategy as a service. We have big firm experience (IBM, PwC) and can offer you the same capability without the overhead cost they have to bear.

We saw the emerging opportunity to integrate the financial expertise of accountancy with increasingly powerful information technologies to create rich new insights into business performance in the early 1980s. Over the intervening years, we have acquired deep and broad technology, strategy and management skills ranging from problem definition to strategic vision to requirements definition through application design and implementation.

We have guided strategic information investment decisions at major corporations for more than 30 years. If you need access to the insights of truly experienced senior executive thinking to guide you through your strategic journey, please get in touch with us.