Net return on customers. Profit and profitability on customer orders

The introduction of a client profitability calculation system makes it possible to determine/adjust the bank's interest and tariff policy for the clients it serves in the direction of cutting off unprofitable (unprofitable) clients by raising interest rates and tariffs.
At the same time, identifying the clients on whose service the bank receives the greatest income makes it possible to justify the introduction of benefits depending on certain parameters of such clients (payment and settlement turnover on accounts, account balances, lending volumes, etc.).
Considering that the complex calculation of the client's profitability requires detailed study and is characterized by high labor intensity (in the absence of an automated calculation system), a simplified approach can be proposed, presented in Table. i P 6. Name of client / Industry
Indicators Value of indicators Previous period Reporting
period Growth (Decrease) Note Payment turnover*: debit credit Average (average chronolotic) value on settlement accounts: settlement ruble current currency deposit (term) bills of the bank : Settlement services Cash services for foreign exchange transactions Other interest on loans for working with securities Income from the bank's placement of account balances* Income - total Bank's expenses:
payment for account balances* for collection
non-operating (for the maintenance of bank employees, administrative expenses - TJJEHO-% РЗ?І5
etc.)**
other Profit (losses) Profitability, %
Note:
* - total for all customer accounts;
** - in a simplified form, the bank's non-operating expenses per client can be calculated as the ratio of total general bank expenses wages of all employees and the maintenance of jobs, taking into account all expenses (utilities, operating, communication services, administrative and economic, etc.) to the average number of bank customers served during the analyzed period.
Filling in the columns of the specified table for a specific client for the previous and reporting periods allows you to assess the improvement or deterioration of its performance from the bank's point of view. At the same time, specific values ​​of operating income and expenses can be determined (with a sufficient degree of accuracy) based on the volume of operations, current tariffs and interest rates. For the correctness of calculations for the analyzed periods, interest income/expenses should be accounted for using the accrued interest method.
The bank's internal income from the placement of the client's resources (account balances, etc.) can be determined taking into account the introduction of a reduction factor to the average volume of the client's resources, reflecting the average amount of diversion of funds into non-income bearing assets to ensure the client's non-cash and cash payment turnover and deductions to FOR. The rate of return (internal price) can be taken on the basis of the prevailing average bank profitability of active operations.
Obviously, the dynamics of changes in indicators for the analyzed periods is not always a reflection of the improvement or deterioration of the client's business. To a large extent, this may be a consequence of changes in macroeconomic conditions, the impact of seasonality factors on the client’s business, changes in intra-industry market conditions, etc. In addition, a change in the level of activity of the client’s work with the bank may be the result of dissatisfaction with the offered prices for services and their quality.
Thus, such an analysis is diagnostic in nature and makes it possible to identify causal relationships between the activity of various categories of customers and the profitability of their service for the bank. Therefore, the quantitative calculated values ​​of the indicators given in Table. 1.16 should be supplemented with an analysis of the reasons for their improvement/deterioration. For each indicator of the table in the Note, explanations should be given for the change in indicators for the analyzed periods.
Based on the results of customer profitability calculations, a summary table is formed. 1.17. At the same time, clients that do not work with; bank, but having (opened) bank accounts. Non-working clients for each analyzed period can be determined based on the analysis of turnover and account balances.
Table 1.17
Pivot table. An example of calculating the profitability of a client Indicators Previous period Reporting period Change Acceptance of Clients - total (100%) Including: non-working*
employed Of them with profitability (100%): high average
low
unprofitable "- there are no turnovers on accounts, the balances are negligible zero)
If there are no turnovers for the analyzed period and negligible (zero) balances on all accounts, the client falls into the group of non-working. Obviously, both "dead souls" and clients with extremely low activity (due to the specifics of the business or other reasons), but "live" ones, can get here.
The positive dynamics of the reduction in the share of non-working clients is one of the indicators of the relative increase in the degree of activity of clients in working with the bank. At the same time, the quantitative values ​​of changes in the number of non-working clients are also important.
Profitability is calculated only for working customers of the bank. The following gradation of profitability levels is proposed: high, medium, low. Clients with a negative calculated rate of return are classified as unprofitable. Levels of profitability of clients for each specific bank may differ significantly. The limits of change (scatter of values ​​from the average calculated level) can be determined according to the specific values ​​obtained for the profitability of the bank's customers using the cluster analysis method.
Obtaining a general picture that characterizes the structure of the client base in terms of the profitability of clients for the bank is very important for analyzing the bank's client base and developing measures to improve the efficiency of the banking business as a whole. So, if, as a result of calculations, the share of clients with a high rate of return is insignificant, with a high value of the return on banking assets as a whole, then this reflects a negative trend and characterizes the bank's dependence on a small number of large customers. In this case, it is necessary to find out the existence of property and other relations between the largest clients and the bank: whether they are shareholders, borrowers of the bank, etc. The presence of such relations, on the one hand, can be considered as a positive factor characterizing the interest in working with the bank, however, on the other on the other hand, does not exclude the deterioration of the business of such clients (due to various reasons and factors of an external and internal nature), which will lead to a deterioration in the position of the bank as a whole.
It should be noted that in practice each bank is characterized by a different structure of resources (own and borrowed), uses (has) different options for attracting them (on the interbank loan market, funds of individuals, corporate clients etc.) Therefore, the intrinsic value of banking resources for each bank may differ significantly.
The cheapest resources are customer account balances, the most expensive are deposits individuals, deposits, bills. However, account balances are funds on demand, therefore, according to the bank's liquidity requirements, they can be placed not in long-term assets, but only in short-term ones.
Stability factor. As you know, long-term investments are more profitable than short-term ones. Therefore, it is very important to assess the degree of "stability" of client resources. For this purpose, it is proposed to introduce an assessment of client resources in the form of account balances through the stability coefficient. It is calculated as the ratio of the minimum balance (minimum) to the average account balance for the analyzed period.
This indicator reflects the quality of client resources: the closer it is to one, the higher the quality. Information for * estimates of the degree of stability of client resources in the form of account balances for each specific client is given in Table. 1.17. Depending on the needs for client resources of a particular bank and the available options for placement in active operations, the bank may set different fees for average (average daily for the period) account balances and for minimum balances.
Thus, a comprehensive analysis of the client's profitability for a bank should also include an analysis of the client base in terms of various parameters (quantitative and qualitative). In addition, in order to assess the degree of customer satisfaction with the existing set of banking services and the quality of banking services, as well as the need for new (other) services, it is advisable to conduct customer surveys through questionnaires, etc.
In table. 1.18 shows a conditional example of calculating the profitability of the client. Various work options are considered, characterizing the degree of activity of clients in relations with the bank.
Table 1.18
A conditional example of calculating the profitability of a client of a dim bank Non-operating expenses, thousand rubles. 20,400 Number of clients 1,200 Expenses per client, thousand rubles 17
In a year
The client carries out only settlement and cash operations, does not have a loan Account balances, thousand rubles. 5Q 170 500 1000 2000 3000 Fee per % YEAR 0 / 0 / 0 / 5 / 5 J 10 / balances on / w / / accounts, / gys rub. / ° / 0 / 0 / 50 /100 /300 Income for settlement and cash services 14 50, thousand rubles. 2 6 120 180 Internal % year / 10 / Yu / 10 / 10 / 10 / 10 / income* / / / / / / thousand rubles / 3 / 10 / 30 / 60 / 120 / 180 Profitability, % -24 0 5 4 6 1
The client carries out settlement and cash transactions and uses a loan Credit, thousand rubles. 1,500 2,000 3,000 4,000 5,000 9,000 Percentage % Goal / 5 / 5 / 5 / 5 / 5 / 5 / Margin / thous. / / / / / X / rub. / 75 / 100 /150 / 200 / 250 / 450 Profitability, % 4 5 6 6 7 5
In the first option, the condition is accepted that the client carries out only settlement and cash transactions, does not have a loan, and does not (actively) conduct international and other “expensive” transactions. The bank receives the main income from such a client by placing funds in active operations in the form of his account balances. It is also assumed in the calculations that the client has only balances on current accounts (ruble and foreign currency). i.e. the bank has borrowed resources on demand. The volume of placement of such resources is taken into account, taking into account the reduction factor.
According to the results of calculations in Table. 1.14 quite clearly traced the boundary of the level of profitability of customers. So, with account balances of less than 170 thousand rubles. customer service becomes unprofitable for the bank. In addition, with the established payment for account balances, it is clear that large customers with balances of more than 3 million rubles. provide the bank with much lower profitability (at the limit) than with balances of 500-2000 thousand rubles. This allows you to justify the reduction in fees for balances on the accounts of large customers.
In order to trace how the client's profitability for the bank changes when the list of services changes, a second calculation was made, provided that the client, in addition to settlement and cash operations, uses a bank loan. The calculation immediately takes into account the cost of the bank's resources (internal) and the actual profitability of loans by establishing an internal margin (in the example, a rate of 5% per annum is adopted). According to the results of calculations, customer service, regardless of the size of their account balances, becomes profitable for the bank. In this case, the calculation of the interest margin can be reduced to determining the minimum return on the bank's investments, the so-called "dead center" of profitability.
Thus, the analysis of customer profitability is the basis for substantiating the interest and tariff policy of the bank, depending on the degree of customer activity (specific characteristics: payment and settlement turnover on accounts, account balances, lending volumes, etc.), developing new banking services from the standpoint of the greatest acceptability (demand) for specific groups of clients, development / adjustment of the bank's policy in the direction of attracting and serving clients in order to increase the efficiency of the bank as a whole.

An important role in the process of forming customer expectations is played by previous shopping experience, advice from friends and colleagues, information received from active market players and competitors, as well as promises. If supplier information leads to high expectations, it is quite possible that the buyer who is seduced by advertising will be disappointed. If a company sets expectations too low, it will not be able to attract enough customers (despite the fact that the actual quality of the product will exceed the expectations of consumers who still decide to make a purchase). Today some of the most successful companies manages to raise the level of customer expectations and at the same time ensure the quality of the goods corresponding to them. Airline jet blue airways, launched in New York in 1999, has significantly raised consumer expectations for so-called low cost carriers. Passengers were offered completely new Airbuses with comfortable leather seats, satellite TV, free wireless internet and customer satisfaction policy. After some time, other low-cost airlines began to offer some of these innovations.
However, the desire of a customer-oriented company for a high degree of customer satisfaction does not mean that this is the main goal for management. Customer satisfaction increases when a company lowers product prices or improves service levels, which, other things being equal, results in lower profits. A company may be able to increase profitability in other ways than increasing customer satisfaction (modernization of the production process, additional investment in research and development). In addition, the company deals with a range of stakeholder groups: employees, dealers, suppliers and shareholders. A change in the direction of the resource flow in favor of buyers can cause dissatisfaction with "deprived" groups. The philosophy of the company should be to achieve, within available resources, a high level of customer satisfaction and compliance with the requirements of other interested groups.

Satisfaction score

Many companies conduct a systematic assessment of customer satisfaction and the factors that influence it, because customer satisfaction is the basis of customer retention. A satisfied customer usually stays loyal longer, buys new and higher level products from the company, speaks well of both the company and its products, pays less attention to competing brands, is less price sensitive, offers new product ideas to the company or services, and besides, it is cheaper to maintain, since operations with it are of a routine nature. Between satisfaction and customer loyalty, however, there is no direct relationship.
Let's say satisfaction is rated on a scale of 1 to 5. With a very low level of satisfaction (1), customers are likely to refuse the company's services and certainly will not recommend it to their acquaintances. At an intermediate level of satisfaction (2-4), buyers will be very satisfied with the company, but at the same time they will be more inclined to switch to more attractive competitive offers. At the highest level of satisfaction (5), the chances of repeat purchase are high and good reviews about the firm. High degree Satisfaction or admiration for a company creates not just a rational preference, but also an emotional connection with the company or its brand. According to the company Xerox, "completely satisfied" customers are six times more likely to repurchase within the next 18 months than "very satisfied" customers.
When customers rate satisfaction with one of the elements of a company's performance (say, delivery), management must be aware that people's perceptions of a good delivery can vary widely. Customer satisfaction can be related to the speed of delivery, its timeliness, completeness documentation order, etc. In addition, it must be understood that two different customers may report equally high satisfaction for different reasons. Some people are easy to please and they are satisfied in most cases, others are difficult to please, but at the time of the evaluation, they just succeeded.

Quality of goods and services

Maximize lifetime customer returns

Ultimately, marketing is the art of attracting and retaining profitable customers. James Patten of American Express claims that those in his company include customers who spend on purchases in retail 16 times more, restaurants 13 times more, air travel 12 times more, and hotel stays 5 times more than the average American. And yet, every company has customers whose service brings losses. The well-known Pareto rule states that 20% of customers bring 80% of the company's profits. William Sherden suggested an addition - 20/80/30. He believes that "the 20% of the most profitable customers give the company 80% of the profits, half of which is lost while serving the 30% of the least profitable customers." Conclusion: the company can increase profits by abandoning the most unprofitable buyers. Moreover, not always the most profitable buyers of the company are its largest customers, who demand maximum discounts and a high level of service. In contrast, ordinary buyers pay for goods at full cost and are satisfied with a minimum level of service; however, dealing with them is associated with high costs. "Average" customers are well served, buy goods at almost full price, and are often the most profitable for the company. That's why many firms are now looking specifically at the "middle class" of buyers. For example, leading express delivery companies postal items come to the conclusion that they cannot afford to ignore the needs of small and medium-sized shippers. Programs targeted at small clients include placement mailboxes in convenient locations. This allows postal companies to provide significant discounts on letters and parcels that are picked up at the shipper's office. In addition to developing its network, the company UPS, for example, conducts seminars for exporters on the topic of optimizing international transport.

Buyer profitability and competitive advantage

What is a profitable buyer? Profitable Buyer - it is an individual, household or company that generates income over a long period of time that sufficiently exceeds the company's costs of attracting and maintaining them. Please note that we are talking about income and costs over the course of life cycle buyer, and not about the profit from a particular transaction.
Many companies evaluate buyer profitability, but most fail to determine the individual profitability of their customers. For example, banks claim that customers use different banking services, which means that transactions are recorded in different ledgers. Those banks that did manage to calculate individual profitability were horrified by the number of unprofitable customers. Some banks reported that up to 45% of their individual depositors were unprofitable. Here the company has only two options: raise tariffs or cut back on service.
A useful example of buyer profitability analysis is shown in Figure 1. 4.2. The columns indicate the buyers, the rows indicate the goods. Each cell has a symbol indicating the profitability of selling this product to this buyer. Buyer 1 makes a very high profit; he makes purchases of three cost-effective goods ( R 1, R 2 and R four). Buyer 2's profitability is not uniform; he buys one profitable product and one unprofitable one. Buyer 3 is not profitable because he buys one profitable and two unprofitable goods.

Rice. 4.2. Profit Analysis "Customer/Product".

What to do with buyers 2 and 3? The company has two options: 1) raise the price of unprofitable products or stop producing them, or 2) try to sell profitable products to these buyers. If unprofitable buyers refuse to buy, they are of no interest to the company, which will only benefit if they go to competitors.
For buyer profitability analysis(APP) the method of accounting costing by type of activity is best suited. The company evaluates all income from the buyer and deducts costs. The latter include not only the costs of production and distribution of products and services, but also all other resources of the company spent on servicing this customer. If you follow this procedure for all customers, you can classify them by profit levels: "platinum" customers (most profitable), "gold" (profitable), "bronze" (low-profitable, but desirable), and "wooden" (non-profitable and unwanted).
The task of the company is to transfer "bronze" buyers to the category of "gold", and "gold" - to the category of "platinum". From the "wooden" buyers should either refuse, or increase their profitability. To do this, as we have already said, it is necessary to increase prices or reduce maintenance costs.
Companies must create high value not only in absolute terms, but also in comparison with competitors, and at a fairly low cost. The ability of a company to operate in one or more directions where competitors are unwilling or unable to match the level of value and cost it creates is called competitive advantage. M. Porter called on companies to create a sustainable competitive advantage. In general, if a company wants to work long and profitably, it must constantly invent new advantages. Any benefit to the company must at the same time be advantage for buyers and be accepted as such. For example, if a company delivers faster than its competitors, but speed is not critical for customers, this will not be an advantage for them.

Buyer Lifetime Return Estimation

Buying capital of the company

Development of relationships with customers

In addition to cooperation with partners - partnership management- many companies are focused on strengthening relationships with their customers, i.e. on customer relationship management. It is the process of using detailed information about each specific customer and managing all the “touch points” with customers. The ultimate goal is to maximize customer loyalty. common ground refers to any customer contact with a brand or product, whether it be personal use, contact in the media, or simple observation. For example, in a hotel, touchpoints can be room booking, check-in and check-out, participation in programs regular customers, room service, business services, access to the gym, use of laundry services, restaurants and bars. In hotels Four Seasons, for example, rely on personal contacts: service staff always addresses the guests by name, the employees are endowed with great powers and understand the needs of sophisticated businessmen-guests of the hotel; Besides, in Four Seasons there is at least one of the region's best amenities, such as the best restaurant or spa pool.
Customer relationship management enables a company to provide customers with superior customer service in real time. This is achieved through the effective use of information about individual customers. Companies can customize their offerings, services, programs, messages, and media based on data about each profitable customer. CRM is important because aggregate customer returns are one of the main components of a company's profitability. One of the first CRM methods was used by the company Harrah's Entertainment.
Some of the foundations of customer relationship marketing were laid down by D. Peppers and M. Rogers in their One-to-One book series. The authors name the following four principles of "personal marketing", they are also the four principles of CRM:

Any activity related to sales is carried out for the purpose of making a profit. It is the actual sale that provides income to the business, because. at this stage, the company receives money from the client. Profit, in turn, is the main goal of business as such. In order to achieve it, it is not enough just to make sales. They need to be cost effective. In other words, they are effective. Estimating the profitability of sales is an integrated approach, which we will talk about.

Definition of the concept of "profitability"

Profitability of sales, or profitability ratio of sales - an indicator of the financial performance of the company, showing what part of its revenue is profit.

If express this concept as a percentage, then profitability is the ratio of net income to the amount of revenue received from the sale of manufactured products, multiplied by 100%.

Thanks to the profitability indicator, one gets the impression of the profitability of the company's sales process or how much the products sold pay off the costs of its release. So, the costs include: the use of energy resources, the purchase of necessary components, the hours of work of personnel.

When calculating the profitability ratio, they do not take into account the amount of capital of the organization (volume working capital). Thanks to the data obtained, you can calculate how successfully competing enterprises in your field of activity work.

What does profitability ratio mean?

Thanks to this indicator, you can find out how profitable the company's activity is. You can also calculate what share falls on the cost price after the product has been sold. Having an understanding of the profitability of sales of its products, the company can control all costs and expenses, as well as adjust its pricing policy.

Important! Various manufacturing firms produce a wide variety of products, and for its implementation they also use different strategic and tactical ways, advertising moves, therefore, the value of their profitability ratios will be different. Even if two firms producing goods received the same revenue and profit, and also spent the same amount on production, then after deducting tax costs, their profitability ratio will be different.

Also, the planned effect of long-term investments will not be a direct reflection of profitability. If the company decides to improve the technological cycle of production or purchase new equipment, then for some time the resulting coefficient may decrease significantly. However, if the sequence of introduction of new technologies and equipment at the enterprise has been determined correctly, then over time the company will demonstrate increasing profitability.

How is return on sales calculated?

To calculate the return on sales, use the following formula:

ROS = NI / NS * 100%

• ROS- Return on Sales - profitability ratio, expressed as a percentage.
• N.I.- Net Income - data on net profit, expressed in monetary terms.
• NS- Net Sales - the amount of profit received by the company after the sale of products, expressed in monetary terms.

If the initial data are correct, then the resulting formula will allow you to calculate the real profitability of sales and find out how profitable your company is.

Calculation of the company's profitability by example

When starting calculations, it must be remembered that with the help of general formula you can find out how the company's activity is effective or inefficient, but it will not allow you to know in which part of the production chain there are problems.

For example, a company analyzed its activities and received the following data:

In 2011, the company made a profit of 3 million rubles, in 2012 the profit was already 4 million rubles. The amount of net profit in 2011 amounted to 500 thousand rubles, and in 2012 - 600 thousand rubles.

How to find out how much profitability has changed in two years?

Calculations show that in 2011 the profitability ratio was:

ROS 2011 = 500000/3000000 * 100% = 16.67%

ROS 2012 = 600000/4000000 * 100% = 15%

Find out how much the profitability has changed over the estimated time:

ROS = ROS2012 - ROS2011 = 15-16.67 = - 1.67%

Calculations showed that in 2012 the company's profitability decreased by 1.67%. The reasons for the drop in profitability are not yet clear, but they can be found out if you conduct a more detailed analysis and calculate the following indicators:

1. The change in tax costs needed to calculate NI.
2. Calculation of the profitability of manufactured goods. Produced according to the following formula: Profitability = (revenue - cost - costs) / revenue 100%.
3. Profitability of sales personnel. For this, the formula is used: Profitability = (revenue - salary - taxes) / revenue 100%.
4. Advertising profitability of manufactured products. It is calculated using the following formula: Profitability = (revenue - advertising costs - taxes) / revenue * 100%.

When calculating these indicators, it is necessary to take into account the following features of the production process:

1. If the company is engaged in the provision of services, then the cost includes: organization of jobs for sales specialists. For example, you need to buy computers. Rent a room, allocate a telephone line, pay for advertising, purchase software for work and pay for a virtual PBX.
2. Calculating the profitability of sales professionals, you can use a fairly simple formula - gross profit divided by total revenue. But it is better to use it when working with specific indicators: the profitability of each specialist, specific type products, section on the site.

What factors affect the profitability of sales?

You can increase the profitability of sales by reducing the cost and level of costs. However, this must be done thoughtfully and carefully, as such savings can reduce product quality or negatively affect the work of personnel. To avoid this, you should take a comprehensive approach to the issue of increasing profitability and study the following aspects:

• Staff efficiency.
• Sales channels.
• Competing companies.
• Sales process and costs.
• Efficiency of work with CRM.

After these components of the business have been studied, you can proceed to the formation of a sales strategy and tactics. It is also important to understand how profitable each group of goods is separately.

For example, a company offers clients three types of real estate for rent:

• Residential.
• Warehouse.
• Office.

By applying the calculations, for residential real estate, we received the highest rates of return on sales, so you can increase the costs associated with this group of services, as they will pay off.

Increasing profitability in many cases depends on human factor, for example, on the level of employees who are involved in manufacturing process Therefore, the business owner needs to pay attention to:

• Effective application of knowledge of specialists.
• Raising the qualifications of employees.
• Optimization of expenses for specialists who are not directly involved in the production process.
• Introduction of automated systems and innovative technologies.

Profitability may also depend on the industry. Thus, the sphere of heavy engineering demonstrates a slow growth in the profitability of sales, and the highest rates can be observed in the trade sector or in the mining sector. For example, in 2014, the highest profitability indicators were noted in the chemical industry - 16.7% and in the field of subsoil development - 24-33%.

Profitability is influenced by the following features of the enterprise:

• Seasonality of sales.
• What is the activity of the company.
• The area in which the company sells its products (regional attribute).

Ways to increase profitability

The profitability indicator does not always meet the expectations of business owners. In this case, it is important to find the causes of low profitability and ways to eliminate these causes. There are many ways out of the situation, we tried to highlight the main ways to increase the profitability of sales.

We reduce costs. Reducing the cost of goods is the best incentive for profit growth. The main thing is not to do this at the expense of quality. It is better to optimize logistics, work on the professionalism of managers, and agree on more favorable terms with the supplier.

We raise prices. A difficult step that few are willing to take. Given that indecision in this matter is just the main mistake. Dumping is the way to kill a business. Prices can and should be raised. It just needs to be done wisely. First, no sudden jumps. Second, be sure to warn customers ahead of time that prices will rise soon. This is an unspoken rule of good taste and a way to maintain confidence in yourself and your company.

We focus on the client. For any product, the main thing is not the price, but the value that it represents for the buyer. In the selling description, you need to describe in detail what is the main advantage of the product, what problems it helps to solve, etc. This should be information that will make the client buy the product right here and now. If a person understands that you really give him the best offer, then the price increase will fade into the background for him. It is natural that, for our part, you need to ensure good quality goods and services. Not a single sales text will help you if you don’t organize delivery properly or if you “push” people with outright nonsense. And vice versa - with a loyal attitude, a person will become your regular customer.

And to achieve a loyal relationship is simple: go forward where it is appropriate. If the buyer needs extra urgent delivery, implement it. The person is dissatisfied with the purchase (for objective reasons) - offer a refund, replacement or a small compensation at your discretion.

People appreciate not only a professional, but also a human approach. Which ultimately has a positive effect on the profitability of sales.

We sell related products. Standard situation: store manager household appliances after buying a laptop, he offers to take a monitor cleaning spray. A trifle, and one that you were not originally going to buy. However, many agree. And all because this little thing will really be useful for them. Analyze which items from your assortment can go with the main product and offer them to the buyer. In online stores, for such a reception, the block “Buy with this product” is usually used.

P.S. This method suitable for b2b sales. Here, your main task will be to convey to the partner that the additional product will give more sales primarily his company. As an argument, you can use an example-statistics for other partners.

The break-even point is equal to fixed costs divided by the rate of marginal profit (MRR). Accordingly, the higher the NPP, the less product must be sold to become self-sustaining. And vice versa than more money goes into fixed costs, the higher the revenue should be. The influence of the NPP indicator on the break-even point increases with the growth of its value. So, with an NPP of 80%, the growth in sales volumes, as well as their fall, will affect the break-even point more and faster than with 30% of the NPP.

It is important to know that when calculating the break-even point, taxes are not deducted from revenue. This is due to the complexity and differences in taxation systems for different enterprises. For profit management, it is useful to calculate the profitability of a particular direction, product, service, or even a specific order from a specific client. Profitability is the share of revenue received in excess of what is necessary to reach self-sufficiency.

Calculation of the profitability of an individual product or service

In many enterprises, the calculation of profit (or loss) before tax for individual goods or services is carried out with assumptions. The reason for them is that in diversified companies the same employees are involved in the creation of several types of goods and services at once. Accountants themselves have to distribute the cost of paying for the work of such people for several products. In this case, it is almost never possible to achieve absolute accuracy. That's why financial service usually does this approximately, guided by his experience and assumptions. Of course, the calculation can be made to the nearest penny if the company has an automated time tracking system, where each employee notes how many hours he spent on a particular project. But there are not so many enterprises that have the opportunity to introduce such a high-tech product.

Approximate calculation fixed costs in terms of a specific type of product may be incorrect. As a result, the enterprise may stop the production of any product or close the whole direction. But the costs that the financial service used to distribute to him will not disappear anywhere and will have a bad effect on overall financial performance.

Profitability is the share of revenue received in excess of what is necessary to reach self-sufficiency.

Calculation of profitability of work for individual clients

It is known that according to the Pareto law, only 20% of customers bring 80% of revenue. Of course, the ratio may change, but the essence remains - customers are different. And perhaps some of them should be dealt with more time, involving additional employees. When a company has few customers, often one or two of them bring up to 50% of total sales. As the number of customers increases, this share usually falls and can be, for example, 5%. But still, it is worth considering such customers as key ones. After all, it is enough to find only 20 such customers, and they will make up the same level of sales as a hundred or two small ones, with a share of 1% or less. But keep in mind that, as a rule, the requests of large customers and their service requirements are higher than those of small ones. In addition, they often knock themselves out Better conditions, prices, discounts. And for businesses, that means costs.

Economic gurus recommend separately calculating the marginal profit margin for customers whose share in total sales is 5% or more. At the same time, it is imperative to take into account all the overhead costs associated with such a client, from birthday gifts and dinner meetings (expenses not only for food, but also for the manager’s salary) to printing and preparing an additional package of documents and expenses for them. delivery. Having correctly determined all the indicators, you can easily find out the break-even point of the enterprise and adjust the development strategy, taking into account the resulting calculations.

Satisfying, or rather "pleasing" customers, has recently become nothing less than a corporate mantra; the belief lies in the fact that it is through the satisfaction of customer needs that organizations can profit and, therefore, grow and develop.

While the underlying argument sounds compelling (a coin organization only makes money from customers buying the products or services it offers), there is a caveat: not all customers are the same. Some customers make a significant contribution to the profits of the organization, while others actually cause losses - for example, if the cost of providing a product or service is higher than the income received from this activity.

The key question this indicator helps answer is how much profit do our clients bring us?

In their zeal to "please" customers, corporate leaders expose themselves to the risk of loss. They offer their clients additional features product and services without covering the cost of providing them.

This “disparity” in customer profitability has been known for decades and has been confirmed by numerous studies. To give one striking example, a customer analysis conducted by a US insurance company showed that 15-20% of customers bring in 100% (or more) of profit. Further analysis showed that the most profitable clients generate an annual profit of 130%, 55% of the clients are break-even, and the 5% of the least profitable clients generate a loss equal to 30% of the annual profit (see "Example").

Thus, the measurement of profitability by the client allows the organization not to forget about its main goal: making a profit from the sale of products and services.

How to take measurements

Information collection method

The collection of information is based on the analysis of marketing and accounting data, as well as the results of cost accounting by type of activity.

Formula

Customer profitability- this is the difference between the income received and the costs associated with ensuring the relationship with the client, for a certain period. In other words, customer profitability is pure cash deposit individual client to the organization.

Since the client's profitability covers several time periods, this indicator is not essentially the only one. There are four main dimensions of customer value:

1. historical customer value, which characterizes the value received from the customer over a period such as a quarter, a year, or since the inception of the relationship. The indicator can be measured as an average of previous periods or weighted, where more weight is given to recent periods. Averaging leads to smoothing of reporting data for the client, giving consistency to even values;
2. the current value of the client, which considers a shorter period of time, more often a month (to match reporting cycles). The current value can be volatile, since the cyclical factors of the relationship with the client are often not reflected within one month. The advantage of the current value measure is to highlight the effects of changes in the customer relationship compared to previous periods. This indicator is most useful for quantification benefit from various campaigns, new offers and price changes;
3. the present value of a customer, which is a future-oriented metric that typically looks at the future revenue streams and expenses of an existing business. This indicator usually takes into account only the contractual duration of use of the current product or service. Present value is used to rank customers according to their value and determine sales force compensation rates, and is often used to model the impact of planned pricing decisions;
4. customer lifetime value is another future-oriented metric. What distinguishes it from present value is the modeled component: lifetime value takes into account the expected flows of income and expenses not only from existing relationships, but also from those expected in the future.

Additionally, organizations often use activity cost analysis to measure the ongoing total cost of providing a service or product to a customer. This approach requires only two parameters to be obtained: the hourly rate of each category of resources performing work (customer support) and the time spent by these resources on certain activities related to the product, service, and customers. For example, if the hourly rate for a helpdesk employee is $70 per hour, and a single transaction for a customer takes 24 minutes (0.4 hours), then the cost of that transaction would be $28. The result can be easily scaled to companies with hundreds to thousands of products and services and having thousands of customers.

The analysis of customer profitability depends on the indicator used (see the "Formula" subsection). Keep in mind that there is no single correct measurement of customer profitability as these measurements are applied to different time periods.

The source of information is accounting and marketing data, as well as analysis of cost accounting by activity.

Measuring the profitability of customers is an important procedure, but expensive, especially when analyzing profitability a large number clients. To get the total amount of costs, many companies use an analysis of the costs associated with certain customer activities. Applying this approach requires training, resource allocation, management and payment of dedicated staff.

Target values

Companies must make efforts to turn unprofitable and break-even customers into profitable ones.

Example. Below is an example of calculating the profitability of a bank client.

1. Determine the amount of costs per client. Using activity-based costing models, the bank established the costs of various customer services. For example, an account statement by mail is $1, a call to the bank's contact center is $2, and a visit to a bank branch is $3. The bank then analyzes customer behavior and categorizes them into various categories, such as visit bank branches. However, to simplify the example, we will assume that on average a customer receives an account statement once a month, visits a bank branch once a month, and calls the bank's contact center once every two months. This means that the bank's expenses will average $60 per client per year. (12×1) + (12×3) + (6×2).
2. Determine the amount of profit per customer. In our example, the bank knows that for every dollar invested, it can earn a 3.5% return. If customer A has a $1,500 deposit and customer B has a $15,000 deposit, the profitability is calculated as follows.

Client A: makes a profit of $52.5 (1500 x 0.035); however, if the bank's expenses are subtracted, customer A is making a loss. In our example, the profitability rating would be -7.5 dollars (52.5 - 60).

Client B: makes a profit of $525 (15,000 × 0.035); net of the bank's expenses, Customer B's Profit Rating would be $465 (525 - 60).

Remarks

Organizations need to take a holistic approach to the information provided by customer profitability metrics. For example, current customers are not profitable but have a high lifetime value (and vice versa). Therefore, organizations should not terminate relationships with unprofitable customers without careful consideration.