Exercise 1: Customer Value Growth

You will need your sales reports to complete this exercise. Study the sample table below, and then proceed to enter your own data...

CUSTOMERS: 1^st Half 1998 (SAMPLE TABLE)
No.	Client	Revenues		Gross Margin	Gross Margin	Client	Satisfaction Index	Customers that enhance:				Tot # Entries
		2^nd Half 97	1^st Half 98	2^nd Half 97	1^st Half 98	Since	April 98	Image	Organisation	Competence	Profit >25% quartile
1	Client 1	120,000	140,000	32000	35000	97	95	140000	140000	140000		3
2	Client 2		100,000	-	45000	93	105		100000	100000	100000	3
3	Client 3	240,000	240000	75000	70000	95		240000				1
	Etc…						xx					0
	Others ~20% of revenues	140,000	150000	68000	30000	20%	94	n/a	n/a	n/a
	Total	500000	630000	175000	180000	-	100	380000	240000	240000	100000
	Percent of total			35%	28.5%			60%	38%	38%	16%

Definitions:

Competence enhancing customers: Share of revenues from customers with projects that your company's income-earning employees learn from.
Image enhancing customers: Share of revenues from customers that improve your company's image or gives referrals.
Organization enhancing customers: Share of revenues from customers that improve your company's organization, bring R&D or projects that can be leveraged.
Profit enhancing customers: Share of revenues from customers that improve your company's profits.
Gross Margin can be any profit measure that you use.
Total number of entries: Identifies best and worst customers. Golden customers have 4 entries and should receive special treatment. Customers with zero entries should be dumped.

Now fill in your own information...(you will need your sales reports to fill in the information)...

*If you completed Part I: Online Tutorial, some of the cells in this Customer Template will already be pre-filled.

CUSTOMERS: 1^st Half 1999 (YOUR DATA)

No.

Client

Revenues

Gross Margin

Client

Satisfaction Index

Customers that enhance:

Tot # Entries

2^nd Half 98

1^st
Half 99

2^nd Half 98

1^st
Half 99

Since

April 98

Image *

Organisation*

Competence*

Profit
>25% quartile

Etc…

Others ~20% of revenues

Total

Percent of total

Now that you have the above information to work with... choose the three most relevant indicators for customer growth for this segment of the Intangible Assets Monitor: Customer Value Growth:

Indicators		Definition
	Total $ Revenues and % Growth	Total revenues as reported in revenues statistics. Growth as % compared to last period.
	Organic $ Revenues and % Growth	"Organic" exclude revenues acquired via a merger or acquisition. You are interested in the growth relating to existing customers i.e. growth as % compared to last period.
	Image Enhancing Customers	Customers that... a) are leaders in their industry, Fortune 500 type customers in your markets. Their image "rubs off" on you when you serve them. b) give testimonials or referrals. They help you to gain more revenue.
	% Revenue Share of Image Enhancing Customers	Measures our organization's exposure to such customers. This indicates how large the flow of image and referrals are likely to be.
	% of Market Share and % Growth	Use same definition of market share as reported in your strategic plan or marketing. Growth as % compared to last period.
	Total number of Customers and % Growth	Include customers that make up 80% of total revenues. Growth as % compared to last period.