Customer Value Analysis

Pareto's 80:20 rule crops up time and time again within the real world. Customer value is a classic example; in the majority of businesses, the large portion of companies profits come from a small portion of the customer base. Armed with this knowledge and an identification of the value (or prospective value) of each customer, a number of actionable strategies can be developed to ensure the business becomes more profitable. Examples of the strategies include ensuring better services for the more profitable, improving the sales to the slightly less profitable or not wasting marketing budget on unprofitable customers.