Customer lifetime profitability how to grow and manage your best customers

This article is an extract from Performance, Volume 7, Issue 2, May 2015. The full journal is available at
ey.com/performance
Customer lifetime profitability: how to grow and manage your best customers
Many organizations
still don’t appreciate
how significant social
networks have become
to their customers and
their businesses.
Figure 2. Customer profitability maturity model
Stage 5
Stage 1
Extract data
and create
customer
datamart
Identify data sources
and relevant feeds,
and build datamart for
ongoing data collection
and cleansing
1. Revenue
aggregated at
business unit
level
Stage 2
Understand
customer
revenue
Define the customer
across all product
categories and
summarize revenue
2. Detailed
revenue at
customer level
Stage 3
Attribute
costs
Attribute cost elements
to customers
Enable proactive
management and
identification of cost
elements via the
process and controls
that are now in place
3. Costs
aggregated at
business unit
level
Stage 4
Define
customer
profitability
Calculate customer
profitability and analyze
data inputs
Coordinate activity to
report on customer
revenue and cost
drivers
4. Costs and
revenue
attributed to
customer level
Optimizing
customer
profitability
Proactively monitor and
manage performance
Use cost and revenue
drivers to improve
customer profitability
Leverage customer data
as a strategic asset for
up-sell and cross-sell
opportunities
Leverage customer data
as a strategic asset
for better acquisition
opportunities
5. Profitability
management
1. Preparing the Enterprise for a New Social Customer Service
Model: Adapting Operations and Technology, Conversocial,
2015, http://www.conversocial.com/resources/
white-papers, accessed April 2015.
14 Volume 7 │ Issue 2