Categorising 'profitable' clients to help companies

Companies in the region can do much more to further enhance their market position and realise higher returns in the short term, according to a new study.

The 'keeping your customers when it matters' survey was conducted by Dubai Knowledge Village and strategy consultancy Third Eye. It aimed at gauging how organisations are managing the customer through one of the worst global recessions in history.

More than 400 managers across the GCC responded to the survey that sought to understand how well organisations in the region were managing issues such as retaining existing customer base, focusing on the most profitable customers, and improving the value delivered to them as a way of defending market share and enhancing returns.

The study essentially recommends a few complementary strategies that focus an organisation's resources on its most profitable customers.

Through segmenting customers based on profitability, the study says an organisation can enhance its performance in the short term by adding profitable new customers whose profiles are similar to the existing profitable customer base; growing the profitability of existing profitable or unprofitable customers by increasing account or product penetration; and avoiding unprofitable customers that can be easy to recognise following the profitability segmentation.

Losing fewer existing profitable customers by consistently meeting their requirements for value.

 

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