Commercial Performance Optimization (CPO): small data, big business impact

Focus on what matters

Roughly speaking, your customer-facing departments – sales, marketing, and customer service – have three key objectives: 

1. Attracting the right customers (Get)
2. Keeping these customers on board (Keep)
3. Increasing the business value of each customer (Increase)

CPO can help them excel in each of these and deliver tangible results with data-driven insights and actions. For example, by creating personalized offers, promotions, and marketing communications, by identifying which high-value customers you should prioritize, and more.

In the end, CPO in sales, marketing and service is all about making optimal use of people, technology, time and money for maximum results. It ensures that everything you do has impact and brings you closer to achieving your goals – whether that’s increasing sales, creating better customer experiences, or reducing churn.

Understanding customer value

But how do you get started with CPO? Despite the fact that there is more data available than ever, many C-level executives fail to answer basic questions like ‘how many customers do we have?’ ‘who is our ideal customer?’, ‘how big is customer churn?’, ‘which customers bring the most value?’, etc.

To understand customer value, you need to get the basics right first Our advice? Start from simple transactional data. Everyone has it, it’s easy to retrieve, always available, and great for fundamental insights like revenue breakdown, customer value and value-based segmentation (VBS), churn evaluation, customer flux segmentation, etc. People like to overcomplicate things, but you can achieve a lot with fairly simple data, once you put your mind to it.

Don't forget the bottom

Notice how the ‘marketing funnel’ and the ‘customer insights’ funnel are mirror images. In marketing, you start by casting a wide net to attract customers, but you don’t know much about them yet. But by the time a responder becomes a loyal customer, you have a lot of information about them. These ‘bottom-of-funnel’ insights can tell you a lot about who your ideal customer is and provide unique opportunities for commercial optimization. 

In one manufacturing company, we discovered that 60% of the customer base only generated 3% of total business revenue. Moreover, key accounts turned to be up to 163 times more valuable than ‘normal’ customers. This gives sales and service people a very unambiguous picture of which meetings or requests to prioritize.