Client Value

Presentation on assigning value to customers

Transcript

1. Client Value Kevin Pledge
2. Agenda Why is client value useful? Example of actual client value study Group discussion
3. Quick survey  How many of you know the average number of contracts your customers hold with your company?  How many of you know the average number of contracts your customers hold in total?  How many of you know the number of customers you are losing each year?  Do you know how many of these customers are going to other companies?  Do you know the future value these customers could contribute?
4. What is Client Value? Value of inforce business plus, Value of future new business
5. Client Value An example
6. Client Value - an example Current Premium 100 Cust $140,000 50 Cust $50,000 50 Cust $40,000
7. Client Value - an example Current Premium Future Revenue 100 Cust $140,000 $280,000 50 Cust $50,000 $400,000 50 Cust $40,000 $320,000
8. Client Value - an example Current Premium Future Revenue Relation- ship "Value" 100 Cust $140,000 $280,000 0.6 $168,000 50 Cust $50,000 $400,000 0.2 $80,000 50 Cust $40,000 $320,000 0.4 $128,000
9. Client Value How do we calculate ‘Future Revenue’?
10. Revenue vs Profit  Problems with using profit profits vary according to product, term, distribution channel the way you charge may change over time Choose revenue because revenue information is more readily available we are after a ‘targeting model’
11. Future Revenue  (P(product) x Average Premium) Life-stage Affluence
12. Client Value How can we calculate ‘Relationship’?
13. Relationship Years Score Number Score 1 0.68 None 0.17 2 0.62 1 0.41 3 0.53 2 0.55 4 0.45 3 0.63 5 0.37 4 0.66 >5 0.24 >4 0.67 No. of active purchases Years since last purchase
14. Relationship Age Score Retirement Score 16-25 yrs 0.61 No 0.40 26-35 yrs 0.57 Yes 0.66 36-45 yrs 0.52 46-55 yrs 0.49 56-65 yrs 0.41 >66yrs 0.29 Current Age Product
15. Relationship - other factors Features of salesperson Product breadth Product features Life-stage and affluence