Customer Portfolio Management Taking CRM to the Next
- Slides: 12
Customer Portfolio Management: Taking CRM to the Next Level
Overview • Most companies claim to be customercentric, but are not in reality • Traditional CRM fell short of promise, because of process automation at the tactical / departmental levels • Customer Portfolio Management – a strategic approach to deploying CRM
Customers: Assets or Marketplace? • • Customers are revenue producing assets Not an undifferentiated marketplace Do you know your customer segments? What metrics do you use to measure customer relationships? • Few companies measure CR according to its strategic goals • Fewer companies measure CR in terms of cost and capital to acquire and retain them
The Transition from Market Share to Customer Share • “The best 20 percent of customers account for 150 percent of total profits. The worst 20 percent typically lose money equal to 75 percent of profits. ” - Geoffrey Colvin (Angel Customers & Demon Customers) • Companies must focus more on identifying and preserving valuable customers instead of retaining and growing market share • Acquisition of AT&T Wireless by Cingular • The real motive was AT&T’s customers • Each AT&T customer was worth $1, 860 to Cingular
Do You Have Any Unprofitable Customers? • bottom 20 percent of a company’s customers account for losses of up to 75 percent of total profits • cost of customer acquisition is much more expensive than the cost of selling to the existing base. • Classify customers based on key metrics such as – Needs, profitability, cost to serve, buying trends, and strategic value
AGF – Investment Management Company • Facing a mature market, not much room for growth • Used analytics to find that • 29% of customers were responsible for all asset growth • Yet, only 50% of them were receiving adequate support • Was able to design programs that used resources more appropriately
Knowing the customer • Use CRM tools to develop metrics • Classify customers into groups
Customer portfolio
What next? • Profit laggards – Identify cause of nonprofitability and control costs • Revenue laggards – Valuable opportunity to readjust packaging and positioning of products • Unprofitable customers – What makes them unprofitable? – Any Plan of Action to make them profitable
What to do with them?
More specific suggestions
Peoplesoft • People. Soft’s CRM 8. 9 supports customer portfolio management
- Customer portfolio management
- X.next = x.next.next
- What is customer portfolio management
- Customer portfolio
- Customer portfolio management definition
- Market segmentation matrix
- "manage engine"
- Customer relationship management and customer intimacy
- Customer relationship management and customer intimacy
- Intimacy
- Divisibility marketing example
- Mission statement examples for students
- Customer portfolio analysis