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Q&A Forum

Is customer stratification expensive to implement? (Webinar Attendee Question)

This question was asked by an attendee during the Proformative webinar "Using Customer Stratification and Cost to Serve Information in Your Sales Efforts to Maximize Profits" held on October 9, 2012.  You can view a video of the webinar and access the presentation here: https://www.proformative.com/resources/webinar-video-using-customer-stratification-cost

Answers

Topic Expert
John Kogan
Title: CEO/CFO
Company: Proformative, Inc.
(CEO/CFO, Proformative, Inc.) |

Customer stratification can be very inexpensively done in spreadsheets depending on your definition of inexpensive. Since the more powerful the system becomes, the greater immediately impact it has, it pays for itself as it goes. Simple applications can be done by a well informed individual but a great deal of information may be not captured or substandard and the data handling will be brute force. Individuals with those skills are usually very valuable and their time is worth far more than they are paid. Still well worth it, however since the more you get your hands dirty, the better you understand what its telling you. More heavy lifting on data and spreadsheets makes it necessary to update less often as well.

Answer provided by Dr. Barry Lawrence, Program Director, Industrial Distribution Program, Texas A&M, speaker on a recent Proformative webinar on the subject of customer stratification.

John Mansfield
Title: Vice President Business Development
Company: Graybar
(Vice President Business Development, Graybar) |

The major cost for our implementation was the time that our project team had to devote to the project. Everyone had full-time jobs already that we had to borrow time from to review the research, build a model that was relevant to our business, develop strategies to use with the information, and then roll it out to our pilot locations.

We were fortunate to have a team with the advanced spreadsheet and application skills that Dr. Lawrence references that allowed us to identify, download, and analyze our data. And our co-innovation with SAP provided us with the ability to visualize the data in a way that was easily and readily consummed by the sales force.

If you don't have these types of resources, this would be the primary expense involved if you have to hire an outside consultant to support you in your efforts. However, the return on this investment would be substantial if you are able to move the needle even small increments in your profitability.

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