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Understanding Blue Sheep's Money Map customer insight tool: Part 2
by BlueSheep Newsroom, on 21/02/17 11:23
Have you already learned what a Money Map is and why you might need one? If not, then read of part one of this two-part blog.
Otherwise, here we take a look at a some of the information within a Money Map report, giving you a closer look at the sort of information you can discover, and how the results could instigate a new, more efficient and more engaging approach to your marketing.
What are the different customer segments?
A Money Map will reveal four segments of customers, divided into high and low growth groups. Understanding each of these groups ensures maximum value can be leveraged to ensure you deploy your resources effectively.
Treasures
Stars - High sales and positive margin, high penetration and good potential for growth in the future.
Strategy: These customers offer great value to you, are profitable when acquired with a good economic outlook. Retaining these customers are critical to extract their maximum value and should be treated with reverence for their future potential.
Golden Oldies - Positive or high margin or sales, high penetration but potentially in decline.
Strategy: These customer generate higher than average profit or sales and you do well acquiring them. However, potential may be poor as these businesses may be in decline or business is tight. They'll need good account management and price promotions.
Sales Promotion
Profit Challengers – Low or negative margin or sales, high penetration and in growth.
Strategy: These customers generate a loss or low sales but you do well acquiring them and growth potential is good. Strong account development plans should be developed to retain and grow these accounts into profitable ones.
Thread Bares - Low or negative margin or sales, high penetration but potentially in decline.
Strategy: These customers contribute little revenue but you do well acquiring them. However, future potential is poor as these businesses are in decline. You should offer these businesses generic sales promotions to build positive margin or sales where possible.
Market Development
Shy but Willing - Positive or high margin or sales, low penetration but with good growth prospects for the future.
Strategy: These businesses offer great value to the organisation; however, substantial effort is required in attracting them. These businesses are growing, so a key segment for your own future growth.
Living Dead - Positive margin or sales, low penetration and in decline.
Strategy: These businesses are profitable customers of the organisation. However, substantial effort is required in attracting them and their economic outlook is poor. Price is likely to be the order of the day. Target promotions at this sector carefully and check credit terms regularly. Try to increase penetration levels – but beware of heavy declining businesses.
Avoids
Outside Bets - Low or Negative margin or sales, low penetration but show signs of future growth potential.
Strategy: These businesses generate little or low sales, and are difficult to acquire. However, these businesses have a good potential for future growth. Targeted promotions should be developed that ensure positive margin or sales that are quickly realised.
Dead Horses - Low or Negative margin or sales, low penetration and in decline.
Strategy: The organisation are difficult to sell into, generate little or no sales and margin, and the economic outlook for these businesses is poor. These customers should be passed onto third parties as they probably cost more to service than you make from them.
How do I read a Money Map?
A full Money Map report contains a comprehensive and in-depth selection of visualisations, including regional summaries, business type summaries, SIC code analysis, CAMEO analysis and much more.
In this instance, we’ll stick with the multivariate chart clients receive as part of a sample money map report.
The Multivariate analysis uses prepared customer data, creating four high growth/low growth customer segments, based on their correlation between Market Penetration Factor (MPF, the customers you already have within a segment compared to lookalikes in the market) and Revenue Factor Analysis (RFA, the percentage ratio of revenue to customers). This defines ease of acquisition and revenue performance respectively.
The MPF and RFA are traffic light coded relative to a score of 100. A number over 100 means an over-performing segment, while less than 100 means underperformance.
What else can a Money Map tell me?
Find more of your most profitable prospects with a FREE customer insight report!
Email: baa@bluesheep.com