Measuring and Managing Customer Profitability - From Growing Sales to 'Profitable' Sales

Instructor: Gary Cokins
Product ID: 704679
  • Duration: 90 Min
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This training program will focus on how to shift the mindset from growing sales to growing profitable sales and to view customers as investments like in a stock portfolio to seek higher ROIs – return on customers (ROC). It will also look at how measuring forward-looking customer lifetime value (CLV) differs from calculating historical customer/consumer profitability for B2C industries.

Why Should You Attend:

Customers increasingly view suppliers’ products and standard service lines as commodities. This means that suppliers must shift their actions toward differentiating their services, offers, discounts, and deals to different types of existing customers to retain and grow them. Further, they should concentrate their marketing and sales efforts on acquiring new customers who have traits comparable to those of their relatively more profitable customers. As a result of this shift from being product-centric to customer centric there needs to be an increased emphasis on measuring current and future potential profitability of products, standard service-lines, channels, and customers.

This webinar will explore the mind-shift needed to accommodate moving away from pursuing increased sales volume at any cost to profitable sales volume. Cost accounting leveraging business analytics is essential to achieve this result.

Learning Objectives:

  • Why customers are the source of shareholder wealth creation.
  • Why as differentiation from product advantages is reduced or neutralized due to commoditization, then service level differentiation matters and the customer relationship grows in importance as a competitive advantage.
  • How to shift the mindset from growing sales to growing profitable sales and to view customers as investments like in a stock portfolio to seek higher ROIs – return on customers (ROC).
  • Why the marketing and sales functions need accounting data to better formulate customer account strategies including compensation incentives.
  • How to measure and manage product, channel, and customer profitability.
  • How measuring forward-looking customer lifetime value (CLV) differs from calculating historical customer / consumer profitability for B2C industries.

Areas Covered in the Webinar:

  • The six eras of management accounting including the shift from product and service-lines to a customer-centric one.
  • The continuum of direct costing from project accounting to standard costing to activity-based costing (ABC).
  • Basic concepts about activity-based costing (ABC).
  • Why cost-to-serve expenses (e.g., distribution, marketing, selling, customer service) expenses are more important than product and service-line expenses.
  • How to quickly design and implement a customer profitability measurement system in weeks, not months, using rapid prototyping.
  • Actions taken with the information to make customers more profitable.

Who Will Benefit:

  • Board of Directors
  • CxOs
  • CFOs
  • Accountants
  • Business Analysts
  • Strategic Planners
  • Budget Analysts
  • Marketing Analysts

Instructor Profile:

Gary Cokins is an internationally recognized expert, speaker, and author in enterprise and corporate performance management improvement methods and business analytics. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina. Mr. Cokins received a BS degree with honors in industrial engineering/operations research from Cornell University in 1971. He received his MBA with honors from Northwestern University’s Kellogg School of Management in 1974.

He began his career as a strategic planner with FMC’s Link-Belt Division and then served as financial controller and operations manager. In 1981 he began his management consulting career first with Deloitte, and then in 1988 with KPMG. In 1992 he headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 to 2013 Mr. Cokins was a principal consultant with SAS, a leading provider of business analytics software.

His two most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics, and Predictive Business Analytics. He regularly presents at conferences for the AICPA and state CPA societies. He is a certified CPIM with The American Production and Inventory Control Society (APICS). He is currently the part-time executive in residence for the Institute for Management Accountants (IMA).

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