If the question for an exhibit is to identify which 3 customer segments are the most profitable..should you be doing the calculations on a profit/segment level or profit/customer level (for eg assume segment A has 100 customers, segment B has 200 etc..).
Hi there,
The question is a bit unclear without seeing the graph.
In theory you should analyze the profits in each segment for each customer. However there may be some shortcuts to reach the right conclusion (eg, you may see from the graph that a customer segment is clearly inferior to another and eliminate it from the start).
Best,
Francesco
Hi!
Could you upload the chart here?
I think it might be easier for us to give you a more precise answer.
Best,
Anto
Hi there,
Honestly, I would call out both. That said, this is also case objective dependent (are we trying to improve profits or profitability?).
8 times out of 10, the group that drives the largest profits will be the one we'll want to dissect.
I would clarify on the objective of the client:
1. Is it to maximize absolute total profits?
2. Is it to maximize profit per customer?
In a typical business situation, point 2. is also a lever to achieve point 1.
Expert case by