Customer Portfolio Analysis

Since customers are usually the primary source of recurring revenue for any company, they should be viewed as assets whose value can be expected to increase over time. A customer base is analogous to an investment portfolio with assets that have different rates of return.

The purpose of a Customer Portfolio Analysis is to understand the distribution of value across customers and how they differ in their investment potential. By examining the behavioral patterns, characteristics and tendencies of customers, a CPA Analysis will reveal strategically significant segments who warrant differential investment. Once those segments have been identified, customer management strategies can be developed to increase the lifetime value of those customers and to maximize retention through relationship marketing programs. The analytical insights can also be used to guide the profitable acquisition of new customers; set benchmarks for critical key performance indicators; and fine-tune demand forecasting based on expected revenue growth amongst existing customers.

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