Managing Customers Profitably

Front Cover
John Wiley & Sons, Jan 22, 2009 - Business & Economics - 384 pages
This book is a response to a need in the market place in the fast-growing field of customer profitability analysis and the profitable management of customer relationships. It combines innovative approaches to calculating the value of customers, with the management strategies necessary to make and keep customers profitable.

It includes easy-to-follow instructions on how to calculate customer profitability, including worked examples (non-technical) and discusses strategies and their applications for organizations to manage customers profitably. Based on cases and feedback from the KAM Club and other research, there will be many business-to-business as well as business-to-consumer examples.

The book assumes some level of numeracy in its readership.

The contents include:

  • Assessing product costs, costs to serve and how these can be estimated, and how to deal with customer-specific overhead costs.
  • It discusses the uses and limitations of the use of customer profitability analysis, and illustrates how to calculate customer lifetime value using two methods, one with actual numbers and one which estimates relative customer lifetime value.
  • Provides an innovative approach to calculating the lifetime value of a customer by taking risk into account.
  • Demonstrates how to recognise and value the relationship benefits of customers, such as word of mouth.
  • Brings into discussion the idea that how customers are managed, links to their profitability.
  • Describes how financial portfolio analysis and theory apply to marketing and how, their application to marketing relates to the optimisation of marketing spend.
 

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Contents

Section One How to value your customers
1
1 Latest thinking on valuing and managing customers
3
2 Customer profitability analysis
19
3 Calculating customer profitability
39
4 How to calculate customer profitability for large customer numbers
69
5 Customer lifetime value
83
6 Calculating customer lifetime value
103
7 Calculating and using customer equity
125
10 The customer portfolio using both supplier and customer perspectives
197
11 Risk
227
12 Servicebased segmentation
253
Section Three The strategic decisions that maximize the value of your customers
275
13 Selective customer acquisition and retention
277
14 The role of pricing in creating or destroying value
303
15 Increasing customer equity using value propositions
331
Bibliography
359

8 The relational value of a customer
153
Section Two How to manage a customer portfolio
175
9 Managing a customer portfolio using customer equity
177

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About the author (2009)

Lynette Ryals MA (Oxon) MBA PhD FSIP Professor of Strategic Sales and Account Management, Cranfield School of Management

Lynette has an MA from Oxford, an MBA from International Management Centres (Europe) and a PhD from Cranfield School of Management, where she is Professor of Strategic Sales and Account Management. She is a Registered representative of the London Stock Exchange and is a Fellow of the Society of Investment Professionals.

Currently, she is the Director of Cranfield's Key Account Management Best Practice research Club, Director of the Demand Chain Management Community, and a member of the school of Management's governing Executive Board. She is the author of three previous books and a series of highly-regarded academic and managerial papers and reports. Her PhD on the profitable management of customer relationships resulted in a 270% performance improvement for one of the participating organisations.

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