It is very easy to talk about customer focus and lose the implication of passionate customer management on the profitability of the enterprise.
Robert Kaplan, writes about the application of the BSC( Balanced Scorecard) to customer profitability, which is a key metric to be used in any customer management initiative. He talks about falling into the trap of becoming customer-obssesed rather than customer-focussed in companies, and that could lead to dip in profitability and margins in spite of incremental growth.
We need to rank customers by profitability and then find ways and means to
- Maintain and grow - Highly profitable customers
- Improve processes internally and reduce cost-to-serve on key/important customers but are relatively less profitable today.
- Transform or remove unprofitable customers.