Doing customer portfolio management & analysis the right way

Doing customer portfolio management & analysis the right way
    On this blog post, you'll learn:
  • What is a customer portfolio exactly;
  • How to divide a customer portfolio;
  • The step-by-step to customer portfolio analysis.

Do you know how to do customer portfolio management? If your answer is no, don't worry, we are not surprised. Most business professionals don't do this actively and end up only dealing with active clients, which is important and usually the Customer Success' job (even though it concerns the entire company). But what about inactive clients?

Depending on your market, you might have a ton of customers, and it's important to keep them engaged. Lucky for you, I'll give all the tips on how to do customer portfolio management in this blog post. Just keep on reading!

What is a customer portfolio exactly?

Customer portfolio is a tool used mainly by B2B companies to help organize and develop a valuable communication/relationship with customers. It's usually associated with some kind of technology, such as an ERP, CRM or a database that stores all of the information below:

  • Name of the company;
  • Contacts and associates;
  • Business and segment;
  • Products or services acquired;
  • Billing information, as well as average ticket and total revenue.

You can also have other information on their profile, such as Customer Service Needs, Profitability, type of relationship, and potential additional sales. These information will be, during the customer portfolio management, your criteria for evaluating the relationship and prioritize certain accounts over others. But we'll get to that in a moment.

First: why it's important to do customer portfolio management?

Dormant databases (meaning they are not properly managed) have an average 50% of inactive customers. Research by Management Consultancy firm Bain & Company.

Even though this research was done years ago, this number is still very much true. That's because companies, especially big ones or with more than 5 years on the market, have not changed how they do things. This means that millions of potential revenue are just sitting there, waiting to go to other companies.

Customer portfolio management prevents that. By knowing the companies that you have or had a relationship with, you can prioritize contact and customize service in order to keep everyone happy while extracting the most revenue out of these business opportunities. You can also discard companies that don't have the right fit or that are not bringing the expected return, giving the space to new ones.

To start, divide your customer portfolio in 4 sections

Let's get to the practical stuff! The whole concept of customer portfolio management is that you're dividing your customers into sections to make management and growth easier. Of course there are endless sections you can create based on your company's needs, but we'll talk about the four most common ones:

  • Revenue: here, you'll identify which are your most profitable clients, in order to build strategies focused on dedicating more attention to them. Banks, SaaS and all sorts of companies do this and it's ok. Of course this doesn't mean that you'll ignore the rest of your customer portfolio, but you can have a more personal relationship in order to keep these accounts, the ones that will most likely bring in the bulk of your capital.
  • Geography: your company might have customers spread out all over the state, the country or the world - that's why it's important to separate them according to geography as well. This way, you'll be able to think of strategies that respond better to specific market fluctuations (such as tourism), fiscal year deadlines or hurricane season (who knows?).
  • Segment: grouping clients according to their segment is also a good idea to always get the best out of it. It allows you to create targeted actions based on the current state and evolution of that specific market segment. At the same time, it's possible to think of solutions for any problems in that specific segment and that might be affecting the customer.
  • Type of relationship: ideally, your customer portfolio should have not only paying customers with one profile, but a variety of partnerships, from national accounts to target segments. And don't forget about partners and other channels, which might be useful to bring in new clients.

After that, you'll need to see which customers are active and inactive. For the active ones, ask yourself the following questions:

  • What's their average ticket?
  • How long does it take for the to make a new purchase?
  • Could they be spending more?

For the inactive ones, check:

  • Why are they inactive and did something happen to make them this way?
  • Do they still have fit with your company?
  • Is it worth it to recover this account?

Once you have all of this information on hands, you'll really be able to say that you know your customer portfolio. That's when you'll be ready for the next step...

Customer portfolio analysis: step-by-step

Now that you have your macro data and were able to organize it based on some kind of relevant logic for your business, it's time for the customer portfolio analysis. This is how you'll be able to build a plan in order to utilize the company's portfolio to its best potential.

Do cases with your best accounts

If you have any accounts with national or international projection, use them for success cases! This is a great opportunity to show the practical value of your solution and what can be done with it. Share these cases on social media, your website and blog or even with newspapers and other medias.

For the case to be successful in its concept, it's better when there's already a good relationship between company and customer. Try to find brand advocates, the people that will actually speak well of what you deliver to them and that are proud of their relationship with you. This is the case that will bring the best results.

Track engagement and satisfaction

This is one of the pillars of Customer Success and it's a great way to avoid churn. Why is it part of customer portfolio management? Knowing customers that have a better relationship and stability with you is a great way to find loyal customers or see where is danger of cancellation. Plus, you can guarantee that the highest tickets are engaged and will stay with you.

Find your best sales rep - and the right type of account for them

Your sales team will have people that perform better and others, not as well. Ones might find it easier to bring in a certain type of account while another prefers to focus on a segment. You can identify that through a customer portfolio analysis and create a sales model that distributes this leads to the right rep from the start. This can be used to improve conversion rates, hopefully, and make your sales rep specialists. This means they'll have knowledge of a specific segment/public and be ready with the right arguments in order to make the sale!

Check for purchasing patterns and behavior

Knowing when, what and how your clients make their purchases is a great way to predict demand, organize offer and distribution of the product and build a relationship based on delivering what they need when they need it. Also, check if clients are changing their usual orders, asking for more or less, or maybe missing a couple of repurchases. This might indicate a problem in the future - becoming inactive perhaps.

Define goals for your customer portfolio

How many accounts you want to have? Do you need to improve your average ticket? All of these questions can be answered with customer portfolio analysis, and turned into goals to guide your entire company towards success!

What about your proportion of enterprise x small businesses. Of course this proportion depends on how complex is the sale and what is the average ticket for each company size. If you have a solution that is naturally more expensive, focus on enterprise so you have the expected return. If you have a high ticket but a faster sale and your solution is not that complex and hard to sell, focus on small and medium businesses and startups, for example.

Basically, see what fits best with your company and product!

Don't forget about ex-customers

Keeping a positive relationship with ex-customers is also a good practice of customer portfolio management. Even if they're not your clients currently, nothing keeps them from returning to you in the future. Also, they might be a good reference for future accounts, referring new customers to buy from you. The main thing is, always try and keep a positive relationship upon cancellation or contract termination. If necessary, apologize. You never know what might come from former clients!

As you could see, customer portfolio management is not only a tool for organization, but is strategic in knowing your customers and what type of account you should be targeting. It might also help you think of new sales strategies, such as upselling, in order to increase revenue per client. All of these benefits will allow your business to grow even more, and actually be able to profit from your entire customer portfolio.

And by paying attention to your customers' behavior, it's easier to detect pre-churn. If you want to know more about the topic, check out these re-engagement tricks to avoid cancellations.

Once you know which clients are in danger and which present an opportunity for a bigger ticket, it's time to build a retention flow and choose the perfect automation platform.

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