Do
you know which Clients are most profitable?
IDC Research shows that
20% of your Clients make up 150% of your profit while the remaining
80% of your Clients contribute minimal profits, break-even, or
lose money. Think about that, many clients actually eat away your
profits.
At Full 360, we have the best practices to implementing a Client
Profitability solution. With this solution, you will not only
improve overall profitability but also increase revenue across
client segments, enhance client relationships, improve marketing
effectiveness, apply resource optimization methods, and create
a unified view of the organization. Whether you need to leverage
existing technology or have want to evaluate the need for new
technology, we can help you.
Our 4-step plan is smart, practical, and immediately actionable
regardless of your data state. We help take the first step in
the process and you will learn our methodology and continue to
improve based upon our proven solution framework:
Step
I: Data – "Well, the quality of our data is not that
good"
Data is the foundation
and the starting point for our solution but no one has a perfect
data state. We help you take inventory of Revenue and Expense
Data and provide you with a plan for the future. This creates
a unified view of your company.
In our solution, data falls into 3 primary classes:
• Actual transaction data
by Client – regardless of whether this is
in a data warehouse, multiple data stores, or excel.
We bring in
multiple data sources together in one view
• Total count of transactions by Client
Segment – whether this is
an estimate or an actual count, we can manage what
is
material and logical
• Transaction / Support for all Clients
– whether there is a
transaction or just an estimate of services provided to all
clients, we make certain that this distinction is maintained
Step II: Client Segmentation –
"We already segment our clients"
Most companies already segment clients by Geographical
Location, Industry, and Channel. If you have already done this,
great, our solution builds on the current client segmentation
based upon client needs opposed to client facts. This will allow
you to enhance client relationships and increase marketing effectiveness
Step III: P&L –
"We must tie to the P&L"
P&L Data – We understand it is critical that you have
a fully loaded Client P&L with actual data that reconciles
to the General Ledger. This step will allow you to optimize resources,
including traditional cost reduction venues, while targeting market
segments for profitability improvements.
• Revenue – the solution looks to categorize
the various types of
Revenue:
• New Revenue –
Acquisition of a clients 1st relationship with
a product or service offering
• Existing Revenue
– a subscription type of revenue or
re-occurring revenue
• Cross Sell Revenue
– The additional revenue with an
existing client
• Cost – the solution looks to categorize
the various types of
Costs:
• Acquisition Costs:
The initial costs to bring the Client on
board, the firstproducts or the extending of the relationship
into new products
• Service Costs:
The services that are provided in support of
the product or service
• Support Costs:
The internal components of support - Audit,
Quality Control, or Compliance
• Cost Methodologies: Activity Based Costing,
Unit Costing, Cost
Decomposition, or Allocation Methods –
any combination of
costing methods can apply depending upon the current state
of
your organization.
Step IV: Client Analysis
and Management – "I have a completed the first pass,
where do we go from here?"
We will provide our recommendations for immediate increased profitability
but beyond that, we also provide transparent information regarding
the current state and a detailed roadmap on where to go from here.
