Our first step was to carry out a detailed review of what customer and transactional data existed in each CRM and transactional system operating across the organisation. This was a significant task, but delivered numerous benefits back to the business and their wider programme to consolidate data, systems and IT governance.
This enabled the extraction and consolidation of several years’ worth of data into one analytical database, giving a customer-level single view of revenues.
We then utilised our Customer Value Segmenter tool to develop a set of value dimensions, supplemented with an attitude dimension:
The Current Value dimension placed customers into four categories:
- Critical Few – the top 5% of clients by group-wide value
- High – the next 15% of clients by group-wide value
- Medium – the next 50% of clients by group-wide value
- Low – the final 30% of clients by group-wide value
You may be asking, did the 80/20 rule apply? Well, we can’t give that away even in an anonymous case study – but we can confirm that we were able to show exactly how much value the top 20% of customers delivered to the business (and every other quintile/decile) – and list them!
The multi-year data extract enabled the Value Growth dimension to be populated:
- High Growth = >60% growth
- Some Growth = 20% – 60% growth
- Static = 20% growth – 20% decline
- Some Decline = 20% – 60% decline
- Major Decline = >60% decline
- New Client = No previous year revenue
The Portfolio Breadth dimension reflected how many products and categories the customer buys:
- Wide portfolio = regular multi-product & multi-category
- Narrow portfolio = regular multi-product purchasing in two categories
- Split portfolio = irregular purchasing across categories
- Single category = multi-product in one category
- Single product = one product in one category
The Attitude dimension followed the CRQ relationship quality segments:
- Ambassadors = Have the most positive attitude. Closely identify with you and recommend you to others. Price is less important because of this quality relationship
- Rationals = Have a positive attitude but do not see anything unique in the relationship. Would consider alternative suppliers and are good targets for competitors
- Ambivalents = Either a “don’t care”, or a “love/hate” attitude towards you
- Stalkers = Don’t see anything unique about you but may have high service requirements. Like to play suppliers against each other. Often mainly interested in price
- Opponents = Have a negative attitude towards you and would leave if they easily could. Can often be “won back” in attitude terms if the reason for their discontent is addressed properly
Any customers with no attitudinal data were placed in the Ambivalents segment.