Many business analysts are afraid to ask certain analytic questions about their customers because they know they can never receive an accurate answer. For instance, consider the classic analytic question, "Who are my best customers?" The issue here concerns how the criteria for "best" are defined. In most companies, "best" is defined as the "biggest spenders." Many business analysts and decision-makers adopt this definition because they have access to only their customers' financial data. Most executives understand that "best" should be defined as "most profitable." For example, a key account may rack up several big-ticket sales, but then erode the profit margin with excessive customer support, product customization or other hidden costs.
THE HURWITZ TAKE: The equation for calculating profit is simple arithmetic. The business problem is that the ideal profit calculation must draw data from every customer touch point or source of customer information known as "channels" and factor these into the evaluation of each customer's profitability.
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