Customer Portfolio ManagementSemester Gasal 2010/2011

Customer Portfolio DefinitionThe collection of mutually exclusive customer groups that comprise a businesss entire customer base

Pengumpulan kelompok pelanggan saling eksklusif yang terdiri dari seluruh basis pelanggan bisnis

Objectives of Customer Portfolio ManagementCustomer Portfolio Management (CPM) aims to optimise business performance whether that means sales growth, enhanced customer profitability, or something else - across the entire customer base It does this by offering differentiated value propositions to different segments of customers

Pelanggan Portfolio Management (CPM) bertujuan untuk mengoptimalkan kinerja bisnis - apakah itu berarti pertumbuhan penjualan, profitabilitas pelanggan ditingkatkan, atau sesuatu yang lain - di seluruh basis pelangganHal ini dilakukan dengan menawarkan nilai dibedakan proposisi untuk segmen yang berbeda dari pelanggan

Basic Disciplines for CPMmarket segmentationsales forecastingactivity-based costingcustomer life-time value estimationdata-mining

segmentasi pasarperamalan penjualanactivity-based costingEstimasi nilai seumur hidup pelanggandata-mining

Market Segmentation DefinitionMarket segmentation is the process of dividing up a market into more-or-less homogenous subsets for which it is possible to create different value propositions

Segmentasi pasar adalah proses membagi pasar ke dalam himpunan bagian yang lebih-atau-kurang homogen yang dimungkinkan untuk menciptakan proposisi nilai yang berbeda

Intuitive vs. Data-based SegmentationIntuitivebrain-storm segmentation variables age, gender, life-styleSIC, size, locationproduce word-profilescompute sizes of segmentsassess company/segment fitmake targeting decisionone/several/all segments?

Data-basedObtain customer dataInternal and externalanalyse customer dataidentify high/medium/low value customer segmentsprofile customers within segmentsage, gender, life-styleSIC, size, locationassess company/segment fitmake targeting decisionone/several/all segments?

Market Segmentation Processidentify the business you are inidentify relevant segmentation variablesanalyse the market using these variablesassess the value of the market segmentsselect target market(s) to serve

mengidentifikasi bisnis Anda berada dimengidentifikasi variabel segmentasi yang relevanmenganalisis pasar menggunakan variabel-variabel inimenilai nilai segmen pasarpilih target pasar (s) untuk melayani

Types of Competitor(kitchen furniture example)Benefit competitorsother companies delivering the same benefit to customers. These might include window replacement companies, heating and air-conditioning companies and bathroom renovation companiesProduct competitorsother companies marketing kitchens to customers seeking the same benefit. Geographic competitorsthese are benefit and product competitors operating in the same geographic territory

(contoh perabot dapur)pesaing Benefitperusahaan lain memberikan manfaat yang sama untuk pelanggan. Ini mungkin termasuk perusahaan penggantian jendela, pemanas dan perusahaan AC dan perusahaan renovasi kamar mandiproduk pesaingperusahaan lain pemasaran dapur untuk pelanggan yang mencari manfaat yang sama.pesaing geografisini adalah manfaat dan produk pesaing yang beroperasi di wilayah geografis yang sama

Criteria for Segmenting Consumer Markets

User attributesDemographic attributes: age, gender, occupational status, household size, marital status, terminal educational age, household income, stage of family life-cycle, religion, ethnic origin, nationalityGeographic attributes: country, region, TV region, city, city size, post-code, residential neighbourhoodPsychographic attributes: life-style, personalityUsage attributesBenefits sought, volume consumed, share of category spend

Bivariate Segmentation of the Chocolate Market

Hunger Light snacking Indulgence

Planned 10%

Emotional need 20%

Later sharing 30%

Functional 40%

Satisfaction

Usage

Source: Mintel 1998

Gifts

Familysharing

Takehome

Eat now

Criteria for Segmenting Business Markets

Business market segmentation criteriaIllustrationInternational Standard Industrial ClassificationAn internationally agreed standard for classifying goods and service producersDispersionGeographically concentrated or dispersedSizeLarge, medium, small businesses: classified by number of employees, number of customers, profit or turnoverAccount statusGlobal account, National account, Regional account, A or B or C class accountsAccount value

Examples of ISIC Codes

ISIC 4-digit codeActivity1200Mining of uranium and thorium ores2511Manufacture of rubber tyres and tubes; re-treading and rebuilding of rubber tyres5520Restaurants, bars and canteens8030Higher education

McKinsey/GE Customer Portfolio MatrixHighMediumAttractiveness of market segmentStrongAverageWeakLowFit to company and network competenciesAttractive marketsMedium-priority marketsUnattractive markets

Sales Forecasting Methods

Sales Forecasting using Moving Averages

YearSales volumes2-year moving average4-year moving average2002483020034930200448704880200552104900200653305040496020075660527050852008544054955267200955505410

Costs Vary over the Customer Base [1]Customer acquisition costs Some customers require considerable sales effort to shift them from prospect to first-time customer status: more sales calls, visits to reference customer sites, free samples, engineering advice, guarantees that switching costs will be met by the vendorTerms of trade Price discounts, advertising and promotion support, slotting allowances (cash paid to retailers for shelf-space), extended invoice due-dates

Biaya akuisisi pelangganBeberapa pelanggan membutuhkan upaya penjualan yang cukup besar untuk menggeser mereka dari prospek status pelanggan pertama kali: lebih panggilan penjualan, kunjungan ke situs referensi pelanggan, sampel gratis, saran teknik, menjamin bahwa biaya beralih akan dipenuhi oleh vendorKetentuan perdaganganHarga diskon, iklan dan promosi dukungan, slotting tunjangan (cash dibayarkan kepada pengecer untuk rak-space), faktur diperpanjang karena-tanggal

Costs Vary over the Customer Base [2]Customer service costs Handling queries, claims and complaints, demands on sales-person and contact centre, small order sizes, high order frequency, just-in-time delivery, part-load shipments, breaking bulk for delivery to multiple sites.Working capital costs Carrying inventory for the customer, cost of credit.

Biaya layanan pelangganPenanganan permintaan, tuntutan dan keluhan, tuntutan penjualan orang dan contact center, ukuran pesanan kecil, frekuensi order tinggi, pengiriman just-in-time, pengiriman beban sebagian, melanggar massal untuk pengiriman ke beberapa situs.Biaya modal kerjaMembawa persediaan untuk pelanggan, biaya kredit.

Activity Based Costing in a Claims Processing DepartmentGeneral ledger: claims processing department $ $ $Actual Plan Variance Salaries620,400 600,000 (21,400)Equipment161,200 150,000 (11,200)

Travel expenses 58,000 60,000 2,000

Supplies 43,900 40,000 (3,900)

Use & Occupancy30,000 30,000 -----

Total914,500880,000 (34,500)ABC view: claims processing dept. $Key/scan claims31,500Analyse claims 121,000Suspend claims 32,500Receive provider enquiries 101,500Resolve member problems 83,400Process batches 45,000Determine eligibility 119,000Make copies 145,500Write correspondence 77,100Attend training 158,000Total 914,500

How Activity Based Costing Help CPMWhen combined with revenue figures, it tells you the absolute and relative levels of profit generated by each customer, segment or cohortIt guides you towards actions that can be taken to return customers to profit It helps prioritise and direct customer acquisition, retention and development strategiesIt helps establish whether customisation, and other forms of value creation for customers, pays off

Ketika dikombinasikan dengan angka pendapatan, ia memberitahu Anda tingkat absolut dan relatif dari laba yang dihasilkan oleh masing-masing pelanggan, segmen atau kelompokIni akan memandu Anda menuju tindakan yang dapat diambil untuk kembali pelanggan untuk mendapatkan keuntunganIni membantu memprioritaskan dan strategi akuisisi pelanggan langsung, retensi dan pengembanganIni membantu menentukan apakah kustomisasi, dan bentuk lain dari penciptaan nilai bagi pelanggan, terbayar

Lifetime Value FormulawhereLTV = lifetime valuem = margin or profit from a customer per periodr = retention rate (e.g. 0.8 or 80%)i = discount rate (e.g. 0.12 or 12%)

Margin Multiples

Data-mining for CPMClustering techniquesDecision treesNeural networks

teknik Clusteringpohon keputusanjaringan saraf

Credit Risk Training Set

NameDebtIncomeMarried?RiskJoeHighHighYesGoodSueLowHighYesGoodJohnLowHighNoPoorMaryHighLowYesPoorFredLowLowYesPoor

Cross-tab of Dependent & Independent Variables

Predicted riskHigh debtLow debtHigh incomeLow incomeMarriedNot marriedGood112020Poor121221

Decision Tree Output

The 80:20 Rule or Pareto Principle

Customer Profitability by Sales Volume Quintile

Shapiro et als Customer Classification MatrixCarriagetradePassiveBargain basementAggressiveHighHighLowLowReceivedpriceCost-to-serve

How Costs Vary Between Customers

Pre-sale costsProduction costsDistribution costsPost-sale costsGeographic location: close v. distantOrder sizeShipment consolidationTrainingProspectingSet-up timePreferred transportation modeInstallationSamplingScrap rateBack-haul opportunityTechnical supportHuman resource: management v. repsCustomizationLocation: close v. distantRepairs and maintenanceService: design support, applications engineeringOrder timingLogistics support e.g. field inventory

Fiocca Step 1

Key difficult

Key easy

Non-key difficult

Non-key easyHighHighLowLowStrategic importance of accountDifficulty in managing account

Fiocca Step 1: Strategic ImportanceStrategic importance is related tovalue/volume of the customers purchasespotential and prestige of the customercustomer market leadershipgeneral desirability in terms of diversification of the suppliers markets, providing access to new markets, improving technological expertise, and the impact on other relationships

Fiocca Step 1: Difficulty of Managing RelationshipDifficulty of managing the customer relationship is related to:product characteristics such as novelty and complexityaccount characteristics such as the customers needs and requirements, customers buying behaviour, customers power, customers technical and commercial competence and the customers preference to do business with a number of supplierscompetition for the account which is assessed by considering the number of competitors, the strength and weaknesses of competitors and competitors position vis vis the customer

Fiocca Step 2Assess key easy and key difficult accounts:The customers business attractivenessThe strength of the buyer/seller relationship

Fiocca Step 2: Customer Attractiveness

Market factorsFinancial and economic factorsSize of key segments served by customerCustomers marginsCustomers share of key segmentsCustomers scale and experienceCustomers growth rateBarriers to customers entry or exitCustomers influence on the marketCustomers capacity utilisation

Competition in the customers marketTechnological factorsCustomers position and strength Customers ability to cope with changeCustomers vulnerability to substitutesDepth of customers skillsCustomers level of integrationTypes of technological know-howLevel of customer patent protectionSocio-political factorsCustomers ability to adapt and fit

Fiocca Step 2: Strength of Relationshipthe length of relationshipthe volume or dollar value of purchasesthe importance of the customer (percentage of customers purchases on suppliers sales)personal friendships co-operation in product developmentmanagement distance (language and culture)geographical distance

Fiocca Step 2: Strategic Options

Turnbull & Zolkiewskis 3D Model

Additional CPM ToolsSWOT analysisPESTE analysis5-forces analysisBCG matrix analysis

PESTE Analysis [1]Political environmentDemand for international air travel contracted as worldwide political stability was reduced after September 11, 2001Economic environment Demand for mortgages falls when the economy enters recessionSocial environment As a population ages, demand for health care and residential homes increase

lingkungan politikPermintaan untuk perjalanan udara internasional dikontrak sebagai stabilitas politik di seluruh dunia berkurang setelah September 11, 2001lingkungan ekonomiPermintaan untuk hipotek jatuh ketika ekonomi memasuki resesilingkungan sosialSebagai penduduk usia, permintaan untuk perawatan kesehatan dan rumah hunian meningkat

PESTE analysis [2]Technological environment As more households become owners of computers, demand for internet banking increasesEnvironmental conditions As customers become more concerned about environmental quality, demand for more energy efficient products increases

lingkungan teknologiKarena semakin banyak rumah tangga menjadi pemilik komputer, permintaan untuk meningkatkan internet bankingkondisi lingkunganSebagai pelanggan menjadi lebih peduli tentang kualitas lingkungan, permintaan energi yang lebih efisien produk-produk meningkat

5-forces AnalysisThe profitability of an industry as measured by its return on capital employed relative to its cost of capital is determined by 5 sources of competitive pressure competition within the established businesses in the marketcompetition from potential new entrants competition from potential substitutesthe bargaining power of buyersthe bargaining power of suppliers.

Profitabilitas industri-yang diukur dengan return on modal yang digunakan relatif terhadap biaya modal - ditentukan oleh 5 sumber tekanan kompetitif1. persaingan dalam bisnis yang didirikan di pasar2. persaingan dari pendatang baru potensial3. persaingan dari pengganti potensial4. daya tawar pembeli5. daya tawar pemasok.

BCG MatrixSTARQUESTION MARKCASH COWDOGCash use equals cash generationStrategy: Grow and buildHeavy cash usersStrategy: Aggressive growth or divestCash generatorsStrategy: Maintain and milkCash usersStrategy: DivestHighLow10x1x0.1xMarketgrowthRelative market shareProduct evolutionDirection of cash movement

Strategically Significant Customer [1]High future life-time value customers These customers will contribute significantly to the companys profitability in the futureHigh volume customers These customers might not generate much profit, but they are strategically significant because of their absorption of fixed costs, and the economies of scale they generate to keep unit costs low

Tinggi nilai kehidupan-waktu mendatang pelangganPelanggan ini akan memberikan kontribusi yang signifikan terhadap profitabilitas perusahaan di masa depanPelanggan volume tinggiPara pelanggan mungkin tidak menghasilkan banyak keuntungan, tetapi mereka signifikan strategis karena penyerapan mereka dari biaya tetap, dan skala ekonomi yang mereka hasilkan untuk menjaga biaya unit yang rendah

Strategically Significant Customers [2]Benchmark customers These are customers that other customers followEX. Nippon Conlux supplies the hardware and software for Coca Colas vending operationWhilst they might not make much margin from that relationship, it has allowed them to gain access to many other marketsIf we are good enough for Coke, we are good enough for you, is the implied promiseSome IT companies create reference sites at some of their more demanding customers

Pelanggan patokan Ini adalah pelanggan bahwa pelanggan lain mengikuti EX. Nippon Conlux memasok hardware dan software untuk operasi penjual Coca Cola Sementara mereka mungkin tidak membuat banyak marjin dari hubungan itu, telah memungkinkan mereka untuk mendapatkan akses ke banyak pasar lain "Jika kita cukup baik untuk Coke, kita cukup baik untuk Anda ', adalah janji tersirat Beberapa perusahaan IT membuat situs referensi 'di beberapa pelanggan mereka lebih menuntut

Strategically Significant Customers [3]Inspirations These are customers who bring about improvement in the suppliers businessThey may identify new applications for a product, product improvements, or opportunities for cost reductionsThey may complain loudly and make unreasonable demands, but in doing so, force change for the betterDoor openers These are customers that allow the supplier to gain access to a new marketThis may be done for no initial profit, but with a view to proving credentials for further expansionThis may be particularly important if crossing cultural boundaries, say between west and east

inspirasiIni adalah pelanggan yang membawa perbaikan dalam bisnis pemasokMereka dapat mengidentifikasi aplikasi baru untuk produk, perbaikan produk, atau peluang untuk pengurangan biayaMereka mungkin mengeluh keras dan membuat tuntutan tidak masuk akal, tetapi dengan begitu, memaksa perubahan yang lebih baikpembuka pintuIni adalah pelanggan yang memungkinkan pemasok untuk mendapatkan akses ke pasar baruHal ini dapat dilakukan tanpa keuntungan awal, tetapi dengan maksud untuk membuktikan mandat untuk pengembangan lebih lanjutHal ini mungkin sangat penting jika melintasi batas-batas budaya, mengatakan antara barat dan timur

SSCs at a Scandinavian Timber ProcessorEconomic returnFuture business potentialLearning valueReference valueStrategic value byproviding access to new marketsstrengthening incumbent positionsbuilding barriers to new entrantsThis company considers 5 attributes in identifying their strategically significant customers

Core Customer Management StrategiesProtect the relationshipRe-engineer the relationshipEnhance the relationshipHarvest the relationshipEnd the relationshipWin-back the customerStart a relationship

1. Lindungi hubungan2. Re-insinyur hubungan3. Meningkatkan hubungan4. Panen hubungan5. Mengakhiri hubungan6. Win-kembali pelanggan7. Memulai sebuah hubungan

ReferencesFrancis Buttle, Customer Relationship Management: Concepts and Technologies, 2e, Elsevier Ltd., 2009Baran, Galka and Strunk, Principles of Customer Relationship Management, South-Western, 2008