Background

Active in more than 30 countries with 30,000 employees, our client is a leading worldwide provider of sustainable packaging solutions, paper products, and recycling services. With a large portfolio of customers, the management team needed an in-depth understanding of which customers are more profitable in order to make more strategic decisions.

Challenge

Customer profitability is not only measured by the revenue a customer brings, but also by the related fixed and variable costs, the effort needed to maintain the customer, and the effect the customer has on the reputation of the client. A key challenge is to combine these factors to accurately define which customers are positively impacting business margins.

Approach

- Standardize cost and cost measurement principles across 17 countries and ERP systems. - Harmonize business definitions and resolve data quality issues by implementing a master data management solution. - Create a dynamic reporting system, providing business users with a visual method for defining which customers to retain. A whale curve graph allows end users to dive into all available profitability details per customer.

Key results

Benefits

Our client gained a better understanding of customer profitability by grouping all available information into customer profitability segments and regions. This enabled them to establish benchmarks to take more strategic actions, resulting in a significant increase in overall profitability.

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