Targeting customers based on economic worth

A common objective for many financial service companies today is to focus on their best customers and to align their investment in customers based on the economic worth of the customers. Yet, as simple and practical as this seems, many companies have not been able to implement the tools and processes that will allow them to do this effectively. One tool that helps identify the economic worth of customers is ‘grading’. Grading is a powerful tool that helps companies manage customer relationships based on economic worth. While there are several grading methodologies and many variations within these methodologies, the best approach is one that is tailored to a company's specific situation and one that is capable of being implemented. By using grading in combination with other tools and processes, financial service firms can target their customers more economically, reduce customer defection and increase revenue.