Are we ge­ne­ra­ting in­co­me from cu­sto­mers or from pro­ducts?

Is any sale a good sale?

Information about customer income often has a revolutionary effect on customer relationship management in practice, with an impact that extends across the whole company. Especially in instances where customer attractiveness is assessed on the basis of turnover, introducing customer income statements allows customers – and sometimes entire market segments – to be reassessed on the basis of their income contributions. Customer relationships which were seen as “good” – in other words, because of high sales – may appear in a completely different light when their costs are explicitly included in the analysis.

Customer income statements often make it possible to enforce a consistent focus on income among customers and in the market. Not just sales and marketing, but all company functions increasingly have to focus their activities on customers. Management is also willing to invest additional resources into customer orientation. But this leaves some questions unanswered:

  • Which customers should these activities target?
  • How does one identify the customers or customer groups who would be expected to make a significant contribution to income?
  • Which customers merit considerable investments in acquisition and retention?

Using digitalisation to assess customer relationships

The task of controllers is to help management answer these questions by supplying appropriate information. In many companies, the controlling department is not in a position to do so: existing planning, information and control systems are usually restricted to providing information about products, processes and the organisation. There is a lack of tools for giving management comprehensive, transparent information about which customers are contributing to profits or will do so in future.

The rapid advance of digitalisation is giving controllers new ways of obtaining and quickly processing customer-specific information from internal and external sources. These developments make it possible to run analyses that used to be considered prohibitively complex or even impossible.

Let CTcon assist you in assessing customer profitability for use in management decision-making

CTcon will help you juxtapose costs caused by customers (or allocated to them) against the revenue they generate. As customers consume different amounts of company resources, cost differences from customer to customer – even when the product is the same – are not unusual. “Real” customer success is based on capturing “customer-specific” revenues and costs close to the source. It often turns out that it is a small number of customers who make a sustainable contribution to company profits.

CTcon will assist you in designing and implementing customer profitability accounting using a three-step approach:

  • Use a preliminary study to identify whether customer profitability accounting should be introduced, and how.
  • Design a mathematical approach for calculating customer profitability (and identify prototypical customer profitability).
  • As soon as customer profitability accounting has been firmly established in your company, it is integrated into existing management systems and tools.

Your contact person

Dr Christian Bungenstock
Partner | Düsseldorf | Germany
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