‘Customer Profit Hacking' methodology offers innovative view on profitability
- Authors of the book “Customer Profit Hacking” advocate use of the concept of ‘profit’ at the individual customer level
- The "Customer Based Accounting" calculation method makes clear which customers deserve more or less focus by a supplier
- Enhanced cooperation between commerce, finance and ICT leads to sustained profitable customer relationships
Is the focus on ‘profit’ an outdated concept?
As a result of the current hype around disruptive start-ups, the concept of ‘profit’ seems to have vanished into the background. That bears similarities to the 'Internet bubble' around the year 2000. When that bubble burst, huge amounts of profits and money disappeared.
Information technology has made huge progress in the past decades. At the same time, conventional business models are becoming obsolete. Innovative thinking and the application of information technology focused on the concept of ‘profit’ seems to be absent. The recently published book on Amazon.com "Customer Profit Hacking' calls for a modernization of the profit concept.
Customer Profit Hacking
The authors Wil Wurtz, Marcel Wiedenbrugge and Michael Dennis conclude that marketing and sales activities in most companies are focused on top line sales revenue; not on achieving results below the line. That is remarkable considering the fact that up to 80% of the customers generate losses for sellers when all of the costs associated with providing services and products to those customers are captured correctly. Our book titled 'Customer Profit Hacking – Roadmap for putting the bottom line on top’ is an effort to shift attention to the bottom line by making better use of the seller’s scarce resources.
Customer Based Accounting
At the heart of the 'Customer Profit Hacking' approach is the calculation method called 'Customer Based Accounting’. This method provides insight into which individual customers deserve more or less attention from marketing, sales, and customer service. This approach enables companies to reduce costs and to use resources more effectively.
Technology is abundantly available to make the necessary calculations, but is used sparingly for this purpose. Close cooperation between ICT, Finance, Sales, Marketing and Customer Service is one of the pillars of the ‘Customer Profit Hacking’ methodology. For each of these disciplines, the book providespractical advice and a way for these departments to join forces and create and maintain sustainable, profitable customer relationships.
The first chapters of the book 'Customer Profit Hacking’ can be downloaded for free
Wil Wurtz, is an authority in the field of "customer value" and CRM. Marcel Wiedenbrugge is an international expert in the field of service and credit management, and among others author of ‘Happy Customers, Faster Cash’. Michael Dennis (San Francisco, USA) is specialized in risk management and is author of ‘The Credit and Collection Handbook’.