Drivers of Customer Profitability

One of most vital questions we all have to face is on profitability. Could we be marketing in a more profitable way? Should we be working with customers how we are now or differently? Is there an 80: 20 rule we should be applying in some way to reduce costs and increase profit?

Most managers have a general idea of what needs to be done to create more profit – customers with larger transaction sizes, who buy multiple products, higher margin products, customers who are more loyal etc. We attempt to focus on those we believe are most important. What most do not know is the exact impact of these factors when taken together.

New River has developed a methodology (combining sampling, financial mathematics and customer behaviour analysis) to do this. It calculates current customer profitability drivers, enables simulations of different strategies to see what the profitability outcomes would be before you implement them.