Customer Portfolio Analysis Definition
A customer portfolio analysis is a strategic marketing tool used by businesses to identify and classify customers according to their value. The purpose of this analysis is to help businesses better understand their customer base and make more informed decisions about where to allocate resources.
There are a number of different ways to measure customer value, but the most common approach is to consider three key factors: revenue, profitability, and lifetime value. Revenue refers to the amount of money that a customer spends with a company over time. Profitability takes into account the costs associated with servicing a customer, such as the cost of goods sold or marketing expenses. Lifetime value captures the total economic value that a customer will generate over the course of their relationship with a company.
Customer portfolio analysis can be used in a number of different ways. For example, it can help businesses segment their customer base, target specific segments for growth, or assess which segments are most likely to churn. This analysis can also be useful for developing pricing strategies or designing new products and services. Ultimately, customer portfolio analysis provides valuable insights that can help businesses improve their bottom line.
