Profit viewed differently
Companies often think that the customers that realise the highest turnover also generate the highest profit. They do everything to keep these customers happy which is what ever company should strive to do, but it is important to be fair in this approach and treat all - small and big players.
You may well need large numbers of staff to hold on to the major customer. Accordingly, it would be appropriate to also take account of the costs this entails. But there is more. You can also take account of customer lifetime value or net promoter score which indicates to what extent your customer will stick up for you and promote you within their network.
Nor should you underestimate the impact of social media. Customers - big or small - who develop into your promoters deserve to receive a bit more attention from you and possibly also a larger marketing budget.
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These are but some elements which put the concept of “profit” in a different, wider context. The ultimate value of a customer is often difficult to quantify and it is not an exact science. However, by linking and centralising different data from various departments, you will obtain a 360 degree picture of your customer. It ensures that every member of staff can at any time see what a particular customer means for your company. And it enables you to gear your services to this so that your company can perform (even) better as a result.
Below are a number of subjects considered in this ePaper:
- Why you should not look at turnover only
- Customer lifetime value
- RFM: recency, frequency and monetary value
- NPS: net promoter score
- CEM or CXM: customer experience management