Submitted by Chris Kaday (not verified) on Sat, 05/26/2007 - 7:22am.
Love that chart – really gets the point across. However there is one important point readers should consider. Is not just about customer value and profit - what about opportunity? Usually customer segmentation is carried out in terms of actual order value over time. However this can be very misleading. Of course companies who spend mega bucks with you and are profitable should be treated as ‘royalty’ but what about large corporates with massive buying power who happen to be tiny spenders with you – right now. If you do the analysis in terms of future opportunity as well as immediate revenue and profit a very different picture will emerge – try it and see.
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Seeds from the blogworld
We search the business blog world looking for posts that illustrate principles, or "Seeds", that if followed, or "planted", will help small businesses grow. We list them here for your convenience. Enjoy.
Love that chart – really gets the point across. However there is one important point readers should consider. Is not just about customer value and profit - what about opportunity? Usually customer segmentation is carried out in terms of actual order value over time. However this can be very misleading. Of course companies who spend mega bucks with you and are profitable should be treated as ‘royalty’ but what about large corporates with massive buying power who happen to be tiny spenders with you – right now. If you do the analysis in terms of future opportunity as well as immediate revenue and profit a very different picture will emerge – try it and see.