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Three P’s for measuring the value of customers

Consider the "Three P's" as a framework for considering the overall strategic value of a customer:

  • Payoff – A financial measure is absolutely an important element to include. Sales or revenue is the most obvious, but many companies move beyond this to measure net revenue, profitability, or contribution.
  • Potential – It is important to consider where the relationship with each customer account is headed. Key measures of potential might include the growth rate of the customer's own business, the degree of penetration across the customer's business units, and share of the customer's total spend.
  • Partnership – Business leaders realize the value of collaborative efforts with both their channel and direct customers. The channel helps us design better relationships and better products. The channel also share financial risk and will often accept shortfalls as an opportunity for improvement, rather than an excuse to leave.

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