Customer Profitability 4 Step Plan
Step I: Data – "Well, the quality of our data is not that good"
Data is the foundation and the starting point for our solution but no one has a perfect data state. We help you take inventory of Revenue and Expense Data and provide you with a plan for the future. This creates a unified view of your company.
In our solution, data falls into 3 primary classes:
• Actual transaction data by Client – regardless of whether this is in a data warehouse, multiple data stores, or excel. We bring in multiple data sources together in one view
• Total count of transactions by Client Segment – whether this is an estimate or an actual count, we can manage what is material and logical
• Transaction / Support for all Clients – whether there is a transaction or just an estimate of services provided to all clients, we make certain that this distinction is maintained
Step II: Client Segmentation – "We already segment our clients"
Most companies already segment clients by Geographical Location, Industry, and Channel. If you have already done this, great, our solution builds on the current client segmentation based upon client needs opposed to client facts. This will allow you to enhance client relationships and increase marketing effectiveness
Step III: P&L – "We must tie to the P&L"
P&L Data – We understand it is critical that you have a fully loaded Client P&L with actual data that reconciles to the General Ledger. This step will allow you to optimize resources, including traditional cost reduction venues, while targeting market segments for profitability improvements.
• Revenue – the solution looks to categorize the various types of Revenue:
• New Revenue – Acquisition of a clients 1st relationship with a product or service offering
• Existing Revenue – a subscription type of revenue or re-occurring revenue
• Cross Sell Revenue – The additional revenue with an existing client
• Cost – the solution looks to categorize the various types of Costs:
• Acquisition Costs: The initial costs to bring the Client on board, the firstproducts or the extending of the relationship into new products
• Service Costs: The services that are provided in support of the product or service
• Support Costs: The internal components of support - Audit, Quality Control, or Compliance
• Cost Methodologies: Activity Based Costing, Unit Costing, Cost Decomposition, or Allocation Methods – any combination of costing methods can apply depending upon the current state of your organization.
Step IV: Client Analysis and Management – "I have a completed the first pass, where do we go from here?"
We will provide our recommendations for immediate increased profitability but beyond that, we also provide transparent information regarding the current state and a detailed roadmap on where to go from here.
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