Profit by Design

Profit by Design key principles:
  • Revenue and profitability for any business comes from customers
  • Your customer portfolio is the key determinant of your profitability
  • Most businesses have a customer portfolio configuration that has 80% of profit coming from 20% of their customers - and conversely 80% of their customers only contribute about 20% of profit back to the business (for some businesses it is pushing 90/10..!)
  • Organisations create these portfolios through an obsessive focus on revenue and are mislead by the eight-great traditions of sales
  • Not all customers are equal
  • Different customer groups represent different value to the business - from a profitability perspective and from their will to be advocates
  • Your customer engagement should be about attracting and keeping your awesome customer - the ones where there is a mutual Two-Way Exchange of Value
  • Your customer engagement is not about closing sales but opening relationships with promoters of what you do.
The Architecture for Customer Engagement
The Initial Inputs
  • This is about identifying your awesome customer groups and getting your value proposition right for those customer a two levels (why you and then about what you do)
  • Adoption  - knowing what customer-market you are in - early adopters, the majority ?- is a big factor in how you find your awesome customers
  • Align your values across the your engagement approach with your customers - people buy emotionally, then seek rational information to support that decision.
Secondary Stage
  • Once the initial inputs are figured out, we then need to understand how your awesome customers make decisions
  • Then we align the optimal engagement activity to support the goal - congruence across the engagement activity
  • And the Goal is: to open a relationship with your awesome customer where there is that optimal Two-Way Value Exchange
  • The Result is: profitable customers who are promoters of what you do.
Act - execution/implementation.  Stop designing and get it done.  Once you have implemented you can start learning more about what is working.

Measure / Monitor - Measures give us feedback on how we are achieving our goals and results.  Design performance measures to give you meaningful feedback on how your implementation went, and how accurate the design of your engagement activity is.  Learn, finetune, progressively improve.

Engagement Design - Act - Measure/Monitor - Learn/Finetune Design - Act - Measure/Monitor - Learn.  Repeat and repeat.
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