"How profitable is our client?" - an unexpected answer to a simple question

Calculate the total revenue generated over a specific period and deduct both direct and indirect costs. It’s a straightforward answer to a question we have often been asked. It precisely addresses the challenge one of our clients approached us with.

We all know assessing profitability is far more complex than the simple question suggests. It requires information beyond mere numbers. Increasing complexity in client demands, costs imposed by changing regulations, risks that need to be quantified and priced in, the growing complexity of your company’s processes, and not to forget resource scarcity and inflationary production costs are just a few aspects driving the complexity of that simple question. Moreover, what if your success itself becomes a challenge?

Client-centric approach - the customer journey

Since we want to understand the profitability of a client, why not start with the client itself? First and foremost, map out the customer journey. Identify all touchpoints where your client interacts with your company, from initial engagement to ongoing servicing. What is your company expected to provide at each touchpoint? Based on this knowledge, sharpen the responsibilities and objectives of every involved function, and learn to perform targeted client services.

The customer journey approach helped our client to shape and provide more targeted services, allocating time, financial means, and technology to touchpoints that truly matter, and reducing resource overload. Yes, it does require an initial and ongoing investment and involves a significant part of the company. However, the benefits, i.e., a better understanding of where value is created and lost, are invaluable.

It starts with a simple question: "What is the profitability of a client?" Are you ready to answer it? We would love to learn more from your experience and expertise.

#customerjourney #profitability #resources #clientstrategy

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