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Enterprise value creation (Customer profitability (Future profit potential…
Enterprise value creation
Customer profitability
Some companies are focused on profitability of products rather that customers
Pareto Law
CRM - develop deep relationships with the customers that are profitable of have a potential
Principle of availability
Warehouse example
Larger customer not always the most profitable
Future profit potential
most valuable customers
second tier customers
below zero customers
Customer acquisition and retention
Have to determine acquisition costs for each segment
Consider different channels
Improving acquisition activities
A framework of customer retention improvement
St 3 Corrective actions to improve retention
St 2 Identification of causes of defection and key service issues
St 1 Measurement of customer retention
Building profit improvement
ACURA framework
up-sell
retention
cross-sell
advocacy
acquisition
Customer life time value
can be by revenue, gross profit, sales etc
Calculating customers' life time value
D= (1+ i )^ n
Co creation
Framework
Supplier value creating process
Encounter process
Customer value creating process