Futureproofing your financials: How your data can help you get the most value from your customers


by Malka Townshend
All businesses love their customers. Analysis of customer numbers, how they behave, there they come from, what they buy and what they spend provides essential information for companies, enabling them to manage their customers effectively and profitably.

But what about knowing which customers are giving you the best return on your investment and why? Imagine knowing how to identify customers that generate the highest levels of profit and determine which customers deliver the most value for the lowest cost and then being able to retain them.

Many organisations have a large number of products and many sectors to target, and it isn’t always easy to determine which communications channel will have the highest impact. Others, such as utilities, have customers where income is only generated after the customer is signed up, making it difficult to know the value of a customer at the point of joining. Furthermore, companies often incur significant costs in order to take on a potentially valuable customer – for example, to provide valuable equipment as part of the joining process.

Common forms of monthly performance tracking and analysis do not provide enough information to be able to resolve these sorts of issues. We have the tools that help companies answer many key questions: Do you know which of your campaigns are effectively impacting the right audience? Would you like of find out how much value a long-term customer plan represents to your business? And wouldn’t you prefer to be certain that an investment made in a prospective client will eventually pay dividends?

With the help of Sagacity Solutions Ltd and our QTOX Customer Value Management, you can have an answer to those key questions which help identify and improve profitability.

What is Customer Value Management?   

Sagacity’s Customer Value Management solution allow businesses to get a better understanding of what drives their profit, and how to improve it. By modelling the profit attributable to each customer, we can determine which customer groups, products, services or channels are generating the best return on investment allowing businesses to focus investment and generate the most profit; in other words – to get the most bang for their buck.

Key features and benefits of QTOX Customer Value Management include:
  • An end-to-end solution providing transparency between commercial activity and profit
  • Data analysis and modelling that delivers information a business needs to maximise profit
  • Reporting, dashboards and data visualisation to present information – allowing business users to understand the trends in their data
  • Governance to ensure the right decision-making is in place
  • Cultural change to reinforce the importance of long-term value generation over short-term ‘quick wins’

Without Customer Value Management, there is a danger that decisions are made on ‘belief’ or based on ‘habit’ rather than ‘fact’; short-term benefits may be prioritised over those providing long-term value generation – as the long-term benefits can’t be as easily quantified. Sub-optimal investment decisions might also go through, causing missed targets and lower company profit.

In the case of one of our clients, many of their ‘more mature customers’ were attracted to the latest smart phones. These customers were considered ‘low risk’ as they paid their bills regularly and were long-term customers but, a large proportion of them were calling product support as they could not use their phones. Using Customer Value Management, Sagacity identified that despite generating monthly revenues, many customers were making the company a financial loss, meaning that the initial investment made in them could not be recouped – largely due to their high support costs associated with this customer group. As a result, additional training was given to the customer at the point of sale, along with a leaflet explaining how to use the core phone functionality, saving our client what had previously been a loss of over €1 million per annum.

How does Customer Value Management work?

Our Customer Value Management solution works in three stages:
  • Customer Modelling – our dynamic QTOX software examines the value that will be generated by each individual customer, and determines the cost of acquiring and managing those customers. A detailed model is produced to forecast all aspects of the customer cash flow – from the cost of acquisition, to the length of time the customer will stay, how much it costs to manage them and the amount of revenue each customer will generate each month. In summary, all relevant and costs are taken into consideration
  • Customer Insights – We then provide detailed reporting on our findings, using them to inform the business on the best way to acquire and manage its customers
  • Fact-Based Decisions – We provide specialist expertise and support to enable our clients to implement revised strategies and maximise revenue income based on this information.

Our solution identifies where best to focus resources, how to make the most out of the money customers generate, and to use data to understand what drives a business, allowing an organisation to make better-informed decisions.

 

 

How has customer Value Management helped our clients?
For our clients who have taken full advantage of our solution, we have been able to:
 
  • Identify unprofitable customer segments – customers who were generation good income but didn’t offset the money spent to acquire and service them
  • Pinpoint individual stores responsible for acquiring customers with high levels of customer churn – driving staff retraining and revised commercial terms
  • Determine that high customer service costs came from specific customer groups with particular devised – significantly lowering their profitability
  • Present Sales teams with the financial impact of their sales – not just the volume of business that they have done – aligning them with the overall business strategy
  • Highlight the lone- term impact of short-term budget gap closure initiatives
  • Optimise return on investment by spending their money in the right ways

While traditional measures of profitability provide a short-term view, our Customer Value Management services allow companies to identify their most valuable customers with the bigger picture in mind. A decade of experience in delivering the highest quality solutions and services for businesses means that we can bring our extensive expertise, as well as our sophisticated software, to the table. Implementing Customer Value Management from Sagacity is essentially like having a crystal ball with which to predict your own levels of success and profitability, allowing you to steer away from that which may slow your progress. So, the only question is: would you like to see into your company’s future?

For more information about QTOX, please visit our website at sagacitysolutions.co.uk or email us at enquiries@sagacitysolutions.co.uk.

Top Judgments Registered

21.03.2012

Sean Dunne
Address: 67 Merrion Square, Dublin 2
Amount: €185,299,627.78

22.01.2010

Donatex Ltd.
Address: R/o 87-89, Pembroke Road, Ballsbridge, Dublin 4
Amount: €98,145,905.00

18.11.2013

Kevin McNulty
Address: Red Bog, Blessington, County Wicklow
Amount: €90,140,183.87

10.01.2011

Michael Daly
Address: Dalmin , North Circular Road, Limerick, County Limerick
Amount: €86,543,769.56

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