Services|Incremental Profit Improvement

OVERVIEW

Although it doesn’t receive great strategic fanfare or Lucite trophies, there is a lot to be said for identifying incremental profit opportunities. This can come in the form of incremental growth at the top line. Or, working capital can be reduced to get more productivity from the same dollars, thereby increasing return on equity.

Locating the most profitable customers, planning how to find more of them, making other segments equally profitable through customer graduation, and recommending ways to improve effectiveness of the sales force are some common ways that we help clients. Pinpointing where a few smart bets online would, in aggregate, have an excellent chance of beating an offline investment is a critical and evolving need. Other routine engagements include in-depth sales pipeline analyses, which help clients to invest marketing dollars at the right place with the right message.

Amongst Stax’s advantages in this arena are specialist research and data mining teams that work in conjunction with our strategic consultants to quantify profit opportunities. Companies today generate a tremendous amount of data, which would just be a diamond in the rough if no one can turn it into information. With a team that can extract and analyze massive data sets in messy formats, we can tell you the little changes you can make to drive profits: what products you need to re-price; which loyal customers to upgrade; where you need to shift marketing or store locations; or how to reallocate sales force to get a far greater ROI per sales person. Any of these insights will help you to ultimately increase your profits and return on equity.

AREAS OF EXPERTISE

  • Customer Segmentation
      • Customer Churn, Profitability & Target Pricing
      • Lifetime Value Analysis
  • Marketing Effectiveness Analysis
  • Media Mix Optimization
  • R&D Allocation
  • Salesforce Allocation
  • Working Capital Optimization

Examples of Engagements:

  • Reducing Working Capital through Predictive Modeling. Identified areas to decrease bad debt expense and increase net operating profit by 46% for a division within a financial services firm, which was sucking up working capital. Stax helped the division to improve predictive modeling at the point of transmittal to reduce accounts receivable, and subsequently, to reduce write-offs and bad debt. In addition, we prioritized the allocation of third party collection service resources to those specific products and areas most likely to yield significant benefit. Our recommendations helped to increase profits by $20M per year and reduce working capital by $10M per year, and allowed Client to spin the division off in an LBO.
  • Optimized Sales Resource Allocation.  Helped a client in healthcare to better understand wins and losses, customer and non-customer perceptions of Client relative to the competition, and ultimately to prioritize sales efforts. We provided a customer-driven, fact-based assessment of the Company’s current market position for sales pipeline management. To do this, Stax conducted over 350 interviews with decision-makers at Client customer and prospect hospitals—a majority of the interviews were with C-level executives. Based on prospect feedback and customer successes, we developed methodology and a roadmap for targeting of prospects.
  • Customer Segmentation and Profitability. Helped a service provider to middle schools and high schools to identify 5% more top-line revenue growth calling on 15% fewer customers. We evaluated the Client database, interviewed sales teams, and overlaid that information with external demographic data. Stax then conducted a rigorous segmentation analysis and applied the results to the Client’s database to improve efficiency of targeting and sales resources.

OPINIONS

With nearly two decades of experience across varied sub-sectors and geographies, Stax is able to analyze the latest market trends in real time. See more case studies.

For recent opinions, also visit our blog.

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