Examples of Our Work – Marketing

Market Segmentation & Channel Development Creates Profitability

Competitive challenges and drop in consumer market price was a problem for a software development firm.  Support and maintenance costs were growing faster than revenue, and service to enterprise clients was suffering.  Looking to maintain consumer market share while growing more profitable enterprise licenses, the board of directors turned to Adder Group for help.

Managing customer value

To make informed retention decisions about individual customers, companies must be able to assign a dollar value to the customer's relationship.  Companies need to dynamically calculate an individual customer's contribution to profit in the context of how the customer relationship develops - or deteriorates - over time.  Proper need-based market segmentation is the foundation for the analysis.

We started with a market segmentation study and then looked at the quantitative value of a customer relationship in each segment.  We were able to project the estimated annual revenues the company would earn from a customer in each given segment over a 5-year period.  Furthermore, using segmentation metrics we were able to accurately forecast the value potential and likelihood of the account maturing into an enterprise license before sales and service resources would be expended on a potential customer contact.  Given this information, we created a channel development plan aimed at growing market-share while increasing revenue and profitability.

Maximizing customer value builds sustainable competitive advantage

The new approach of matching the most appropriate distribution methods and channels to each targeted customer segment produced unparalleled results.  Automating and enhancing customer service decisions allowed the firm to direct marginally profitable customers to less costly channels, resulting in a dramatic 58% drop in the firm’s cost of service per revenue dollar.  Investing these cost savings in enhancing quality, the firm tripled enterprise license conversions over the next two fiscal quarters.