Customer Portfolio Analysis

Is Every Customer a Good Customer?

A customer portfolio analysis helps companies identify which customers generate the most revenue and which are growing the fastest. Stagnating or unprofitable customers can also be identified and potentially let go. By regularly conducting this analysis, a company can allocate its resources more effectively and increase revenue and profitability.

How to Proceed & What the Results Look Like

After calculating each customer's revenue share over, say, the last two years and the respective revenue growth over the last 12 months compared to the previous year, we plot the customers on the four quadrants of the diagram based on the results. The respective positions of customers in the diagram lead us to different strategic approaches. Starting from the bottom left, clockwise:

Low Revenue Share and Low Revenue Growth

These customers have little impact on your business success but still require your attention.

Low Revenue Share, High Revenue Growth

Find out whether these customers have the potential to become your top customers.

High Revenue Share, High Revenue Growth

These are your new top customers and growth drivers. Invest in expanding these relationships.

High Revenue Share, Low Revenue Growth

These are your long-standing top customers. You don't want to lose them, but you also don't want to make major concessions.

Now What? Excel and the Like?

First, you need all relevant transactions from the last two years. These are sorted by customer and prepared accordingly to obtain comparable figures for revenue share and revenue growth. Then we create a suitable diagram with our KPIs: revenue growth on the y-axis and revenue share on the x-axis. Once the data and diagram are properly connected, the available customers should now appear on the diagram.

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