Your customers are diverse, as is their profitability contribution to your business. Predicting their profitability in advance can assist in improving your bottom line in multiple ways by decreasing volatility, better capitalizing on the most profitable customers, and in finding ways to improve the profit contribution of your least profitable customers.
Strategy Insights Profitability Solution, which packages some of the most advanced analytics capabilities coupled with business thinking, is designed to perform analysis at each customer level and assist you in optimizing the profitability from your customer base.
Step 1: Get a 360-degree view of profitability contribution
Get visibility into the profit your business unit or company can expect in the quarter. Alert all stake holders with the news, whether positive or negative , to enable proactive instead of reactive behavior.
Step 2: Dive deeper into why some customers are more profitable than others
Explains commonality in the most profitable and least profitable customers, and identifies what they like – or dislike - most about being your customer.
Assists you to classify customers in different buckets of profitability.
Helps you understand product usage and transaction behavior of the most and least profitable customers.
Predicts profitability contribution of each customer for the next time period.
Step 3: Capitalize on what you just discovered from the data
You can take a number of business actions – also referred as Management Levers- to improve the profitability based on the analysis conducted above. As examples, some are:
Systematically locate the right product and feature to upsell to your most profitable customers.
Align the benefits provided to least profitable customers and their profit contribution by adjusting benefits, fees, and others.
If a sharp drop in profitability is predicted, mobilize pertinent sales and marketing resources to counter the effects.