15% of Customers Generate 150% of Profits!
In working with a long term client I recently used excerpts from a book “Islands of Profit In a Sea of Red Ink’ as the basis for discussing how to further improve profitability. Build on some MIT research from 2010 and now the basis of a successful independent business Profit Isle, the book highlights the huge differences in profitability across customer types – as quoted below: “Over years of experience with EPM, we have found that virtually all companies have a characteristic pattern of profit segmentation: Profit peak customers are typically about 15% of the customers generate 150% of a…