When our client, who works in the financial services sector, was negotiating new business, they had no way of identifying whether the accounts they were being offered would be profitable to them, or indeed worth accepting.
As a result, they were forced to accept all new business and would only be able to review the profitability once the accounts had been through their full lifecycle.
This business model meant that only a third of the accounts they had previously accepted were profitable. Two thirds of the book actually cost our client to administer.
Our Approach
We analysed our client's entire back book and were able to pinpoint a number of key customer demographics that were significant in determining an account's profit margins. By combining the demographics we were able to build our client an account scoring model which accurately predicts the profitability of both their existing and potential business accounts.
Since delivering the solution to our client, they are now effectively able to:
- Understand potential new business, prior to onboarding
- Negotiate appropriate commercials with their clients
- Gain a better understanding of their existing portfolio
- Improve their contact strategy
- Increase profits
- Reduce costs
