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Customer Profitability

20% of your customers are losing you money.  Do you know which ones?

When we analyse client cost profiles a familiar pattern emerges; 20% of customers may make 180% or more of your profits, 60% may make you nothing and 20% may actually lose you 80% of profitability, with customers over- expending their proportion of your capacity. The problem with traditional allocation methods is that they either apply broad brush methods and bear little resemblance to what actually drives the cost, or they use traditional Activity Based Costing (ABC) and over complicate the allocations; making it difficult to trust or interpret the results.

The Whale Bone Curve

The whale bone curve

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