Project and Client Profitability
One of the most vital factors in the functioning of an agency is the metric of Client Profitability. It is one of the most critical analyses that helps in monitoring the value exchange between customer and company, and determining which of the client-company relationships are beneficial and which ones are detrimental to the sum of the revenue being generated.
Client profitability is essential in tracking the variations of value exchange between both the parties, and it also offers insightful data to help in managing the accord between them. Based on the value exchange data provided by the Client Profitability metric, agencies can take proactive decisions to prioritize and allocate their resources in order to maximize the overall profitability of their business.
Here are some of the key challenges most agencies face, where the Client Profitability metric can help in deciding the courses of action:
- Choosing which prospective clients to acquire
- Choosing which clients you want to retain
- Choosing which clients to cross-sell (and what to sell them)
- Choosing which clients you may want to abandon
- Optimizing channels of distribution
- Setting the price (or discount structure) for a product or service
- Setting sales compensation rates
- Setting reward program entitlements
- Setting advertising and promotion budgets
- Setting service levels for Clients
- Identifying Client behaviours that create or destroy value
Additionally, Client Profitability also throws light on the kind of results that the agency is producing for the client. In such cases, the assessment can provide insights into key performance metrics such as:
- Measuring the cost of lost business
- Measuring the value of new business
- Return on a campaign
- Return on a pricing change
- Return on changes in service delivery
Program & Project Analytics
In addition to measuring the Client Profitability, gauging the profitability of a specific Program or Project also yields results that are as vital and essential. This particular analyses can help an agency in making several critical decisions such as:
- Service Levels of the Campaign
- Rates and Scope of the Campaign
- Resource Mix for Campaigns
- Resource Forecasting
- Estimates for future campaigns
A combination of Profitability analytics for specific clients, programs and projects can provide valuable insights into the overall profitability of the agency’s business; and highlight the key areas of the process where relevant changes should be made.
ZAG Analytics Solutions
ZAG offers an aggregate of vital analytics solutions to help agencies in garnering insightful data, identifying the bottlenecks in the system, and streamlining their business processes.
The array of solutions provided by ZAG includes:
- Client / Program / Project Profitability Analysis
- Drill-Down feature utilizing various dimensions:
- Category of Expense / Revenue
- Activities and Tasks
- Media Channel
- Line of Business
- Resource Analytics that illustrate:
- Calendar & Schedule
- Milestone Analytics
- Progress vs. Recognized Revenue (including accrued Costs)
- Critical Path
- What-If Analysis
- Unbilled Accrual Reporting
- Actuals vs. Budgets vs. commitments
ZAG’s analytics solutions can shed light on one of the critical facets of a business process that has normally been ignored by agencies. That while the total profitability of a company can show positive numbers, there are possibilities that the company is investing its resources in such customer relationships which are unprofitable and can have an unfavorable influence on the generated revenue.
ZAG provides tailored solutions that cater to this phenomenon, and help agencies increase their revenue.