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Who is your number one customer? What criterion determines top performing clients? Ranking customers may be important if you want to understand more about your marketing and brand effectiveness.

Many business metrics are measured by examining KPI’s (Key Performance Indicators) and sorting top performers by those indexes. Measuring and examining customer performance can consist of many variables and can become quite complex.

Five KPI’s

Let’s consider five basic indicators:

• Sales Revenue: This one is likely the easiest on the list and one that nearly everyone quickly considers. Sales revenue matters but it likely should never stand-alone. Depending on your business, sales revenue may be quite different from profit.
• Profit: Measuring by profit may make more sense as compared with sales revenue. When we think about profit, we also have to think about gross profit or net profit. What expenses are applied to your profit calculation? Cost of sales may be another indicator to consider.
• Lifetime Value: Often represented as LTV or CLTV (Customer Life Time Value) this metric is often overlooked. Many businesses today become focused on the short term at the expense of missing opportunities that may help you weather the storm. Lifetime value can be calculated in many ways. It can also be historic or come from a predictive model.
• Demographics Score: Typically, there is a sweet spot for every business. In B2B, it may be the number of employees, annual revenue, geographic location, and more. In B2C, it may be things like gender, age, number of children, or household income. The more you know and understand about your demographics the more targeted (and profitable) your efforts can become.
• Social Presence: Yes, in our modern society social presence may be a performance indicator. While this typically requires some investigative work it may be important to recognize. Some businesses will investigate social presence and assign an estimated value. Depending on your business some customers may be helping (or hurting) your brand.

Highly customized performance indicators may matter for your business. Things like buying cycle or patterns, frequency, and how much you spend to market or advertise. What is your ROI (return on investment)?

Ranking Customers

Typically, the more you know or understand about your customers the better, but there is also a cost associated with ranking customers. Most experts would likely agree that some metrics and measurements are better than not having any.

One final note, remember that customers may also be ranking their vendors, which means you.

– DEG

Dennis E. Gilbert is a business consultant, speaker (CSP^TM), and corporate trainer that specializes in helping businesses and individuals accelerate their leadership, their team, and their success. He is a five-time author and some of his work includes, #CustServ The Customer Service Culture, and Forgotten Respect, Navigating A Multigenerational Workforce. Reach him through his website at Dennis-Gilbert.com or by calling +1 646.546.5553.

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