What Is a Customer Portfolio?
A customer portfolio is a collection of products and services a company offers its customers. The portfolio typically includes both current offerings and those in development. The mix of products and services varies depending on the customer base and the company's business strategy.
To create a customer portfolio, companies must first segment their customer base. Segmentation allows companies to identify groups of customers with similar needs. This information can then be used to develop products and services that meet the specific needs of each customer segment.
The customer portfolio is vital to a company's overall business strategy. It is essential to carefully consider the mix of products and services offered and the target market for each offering. A well-designed customer portfolio can be robust for winning new business and retaining existing customers.
Having a customer portfolio can help businesses in several ways. First, it can help companies to keep track of their different customers. This is important for understanding their customers’ needs and how to serve them best. Additionally, a customer portfolio can help businesses segment their customers. Companies can group customers with similar needs and accordingly target their marketing, sales, and customer service efforts.
Lastly, a customer portfolio can help businesses identify opportunities for upselling and cross-selling. By understanding each customer's purchase history and preferences, companies can make tailored recommendations for additional products or services that the customer might be interested in.
The Importance of Customer Portfolio Management
A customer portfolio management system is used by businesses to track and manage their customer portfolios. The system lets companies track customer data, such as contact information, purchase history, and account balances. The system also allows companies to segment their customer portfolios and target specific segments with marketing campaigns.
The customer portfolio management system is critical to a company's customer relationship management (CRM) system. The system helps businesses to track and manage their customer relationships systematically.
Customer portfolio management helps companies to achieve several important objectives, such as the following:
- Increase revenue: Businesses can increase their income by segmenting the customer portfolio and targeting specific segments with marketing campaigns.
- Reduce costs: Businesses can reduce costs by managing the customer portfolio more efficiently.
- Improve customer satisfaction: Businesses can improve customer service and satisfaction levels by tracking customer data and understanding customer behavior.
- Increase customer loyalty: Businesses can increase customer loyalty and repeat business by managing the customer portfolio more effectively.
The Customer Portfolio Components
The Customer Portfolio Components of ISO 20000 Include: -
- Service Catalogue
- Service Level Agreements
- Operational Level Agreements
- Technical Specifications
1. Service Catalogue: -
The service catalog lists all the services that the organization offers. In addition, it provides details such as the service description, service availability, service level agreements, associated costs, etc.
2. Service Level Agreements: -
Service level agreements are agreements between the organization and the customer that specifies the nature and quality of the services to be provided.
3. Operational Level Agreements: -
Operational-level agreements are agreements between the organization and its internal or external service providers that specify the operational requirements for the delivery of the services.
4. Technical Specifications: -
Technical specifications define the technical requirements for the delivery of the services. They include hardware and software requirements, connectivity requirements, security requirements, etc.
Customer Portfolio Analysis
To properly analyze your customer portfolio, you must use the proper methodologies. The ISO 20000 standard guides how to carry out customer portfolio analysis and how to use the results of this analysis to improve your organization's service management processes.
A few different techniques can be used for customer portfolio analysis. Customer segmentation, profitability, and need/value analysis are the most common ones.
1. Customer Segmentation
Customer segmentation is a way of dividing up your customer base into groups based on shared characteristics. This can be useful for customer portfolio analysis as it allows you to see which groups of customers are most valuable to your organization and which ones may be more likely to leave.
There are several different ways to segment customers. Some standard methods include:
• Demographic Segmentation: This involves dividing customers based on factors like age, gender, income, and location.
• Psychographic Segmentation: This involves dividing customers based on personality, lifestyle, and values.
• Behavioural Segmentation: This involves dividing customers based on buying habits, usage patterns, and brand loyalty.
2. Customer Profitability Analysis
Customer profitability analysis looks at how much profit each customer brings in for your organization. This can be useful for customer portfolio analysis, as it can help you identify which customers are less profitable and may not be worth keeping.
This can also help you identify where changes need to be made in your business to increase profits. For example, if you find a particular customer segment less profitable than others, you may need to adjust your pricing or product mix to improve them.
3. Customer Satisfaction Analysis
Customer satisfaction analysis is a way of looking at how satisfied your customers are with your product or service. This can be useful for customer portfolio analysis, as it can help you identify which customers are less happy and may be at risk of leaving.
This can also help you identify where changes need to be made in your business to increase customer satisfaction. For example, if you find a particular customer segment less satisfied than others, you may need to adjust your product or service to make them more comfortable.
4. Customer Churn Analysis
Customer churn analysis is a way of looking at how often your customers stop using your product or service and why they might stop using it.
Churn analysis can help you identify which customers are at risk of leaving, how to keep them from going, and how to attract new customers to replace them.
5. Social Media Analysis
Social media analysis is a way of looking at how people interact with your brand on social media.
This can include analyzing your social media posts to see what kind of reaction they get, how often people mention your brand in social media posts, and exploring the sentiment of social media posts about your brand.
6. Market Segmentation
Market segmentation is a way of dividing up your customer base into smaller groups based on shared characteristics.
This can be helpful for marketing and product development purposes, as it can help you better understand your customers and what they want.
7. Competitive Analysis
Competitive analysis is a way of looking at your competition to see how they are doing relative to you.
This can include analyzing their marketing strategies, looking at their financials, or even observing their behavior.
This can be a valuable way to benchmark your performance, find areas where you can improve, and even keep tabs on what your competition is up to.
Benefits of customer portfolio management
There are three main benefits of customer portfolio management:
- Improved customer satisfaction
- Improved customer loyalty
- improved organizational performance.
1. Improved customer satisfaction: -
The customer portfolio management process helps organizations keep track of customer feedback and identify areas where they can improve customer satisfaction. Organizations can provide better products and services that meet customer expectations by understanding customers' wants and needs.
2. Improved customer loyalty: -
The customer portfolio management process helps organizations to build stronger relationships with customers. Organizations can improve customer loyalty by understanding customer needs and providing products and services that meet their expectations.
3. Improved organizational performance: -
The customer portfolio management process helps organizations identify opportunities to improve their products and services. By understanding customer needs and expectations, organizations can make changes to their products and services to improve their performance.