In today’s economic situation it is essential to detect the obstacles which are creating problems in business development. One of the mainly addressed problem in both small scale and large-scale business is unprofitable customers. Its essential to detect this to avoid the high cost of low profit customers. As they not only affect your business development but also your financial growth. To avoid these businesses should perform an annual customer analysis with the help of a skilled accounting professional.
Customer analytics is a subset of business analytics that focuses on metrics that tell you more about your customers. Where traditional forms of financial and operations analysis only tell the story of what’s happening inside your business, customer analysis tells the story of what’s going on outside your offices — where your customers come from and how they make decisions.
Customer Analysis helps you in analyzing customer transactions to determine which customer or industry will help you generate highest revenue. There are many ways to analyze your customer base such as:
- Sales volume.
- Gross margin profitability.
- Number of transactions.
- Average sales per transactions.
This information will not only detect the customers who are a drain on the company resources, but will also highlight opportunities to sell more to higher margin customers who have low activity.
We at Fair & Square Accounting and Bookkeeping Services, get rid of the clients that are high maintenance, then it frees your organization to focus on the more profitable customers. While a successful strategy might be to cross sell additional products or services to those clients who value the relationship, another strategy would be to target new customers with the same characteristics as the good clients you have today.