Portfolio Analysis
11
Customer Portfolio Analysis Attrition-Migration Tracking
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A quick overview on a technique to analyze a customer portfolio, track attrition and migration and align an organization around the customer.
Transcript of Portfolio Analysis
Customer Portfolio AnalysisAttrition-Migration Tracking
Slide 2
Attrition-Migration Analysis Enterprise-level success should be
mapped to depict value creation and value loss Overlay marketing campaign results onto
the analysis marketing to visually describe impact of marketing programs
August 17, 2011
Slide 3
Key Definitions Attrition: How is a defected customer
defined? Typical defector is 12 contiguous months
with no revenue generating activity Align to your Strategic Profit Model
Value Clusters: What are the natural breaks in performance that enable focus on top customers vs. others? Don’t over-work your portfolio at a macro
level, it will be too difficult to grasp
August 17, 2011
Slide 4
Plan Ahead It’s not enough to know that there is
value creation and value loss What are the drivers of loss? The drivers
of creation? How do customers enter your brand? Who is price sensitive? Who is not?
Macro clusters can drive segmentation to identify customers for brand penetration Migrate customers to new categories,
services to increase relationship
August 17, 2011
Slide 5
Assembling the Data Attrition-Migration reporting looks at movement in
the customer file Understand the value of New Customers against Lost
Customers Understand the value of Improving Customers
against Declining Customers A quarterly look suffices
Customer shift can occur with as little as a single transaction
Year over Year behavior on a periodic basis e.g. Prior Year v. Current Year through the end of a fiscal
quarter
August 17, 2011
Slide 6
Framework
August 17, 2011
Slide 7
How it Works Blue Cells – Consistent Base – customers
retained their value tier Green Cells – Nurture & Grow – customers
improved their value tier Purple Cells – New to File – customers
entering the brand Orange Cells – Downward Migrators –
customers losing their value tier Red Cells – Defectors – customers exiting the
brand
August 17, 2011
Slide 8
How to Read it
140 Customers Retained Tier 1 PY to CYIncreased Sales: $80MM to $85MMIncreased Orders: 1.4MM to 1.5MM
5 Tier 1 Customers Defected$0 Brand Value CY
$2.2MM Brand Value PY
15 Customers Enter the Brand Tier 1
$6.8MM Brand Value CY$0 Brand Value PY
30 Customers Move to Tier 1 CY:PY
$9.5MM Brand Value CY$5.6MM Brand Value PY
Total attrition rate is 4680 customers out of 19545 ~ 24% by count but 5% by sales volume. The danger is in the orange – how many are already gone?
August 17, 2011
Slide 9
The Basics Lead to Insights Attrition-Migration visualizes value patterns
New Customers, Lost Customers, Growing Customers, Declining Customers
Segment the portfolio into manageable clusters of customers
The data is perfect for drill-down analysis Compare Tier 1 CY to Tier 1 PY Analyze Category Performance Analyze Discount Propensity Look at actual attrition vs. expected attrition
August 17, 2011
Slide 10
Portfolio Analysis Even a basic approach to portfolio
analysis will help produce customer metrics for the organization to focus on Common understanding of marketing Common understanding of customers Common understanding of goals
Portfolio analysis will yield a customer focused organizational alignment
August 17, 2011
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The Bryden Group, LLCCustomer Portfolio AnalysisChris DalyFounder, [email protected]
August 17, 2011
