Application of Revenue Growth-profit Margin Matrix for Categorization and Prioritization of Customer Leads

Abstract

Many business process outsourcing (BPO) companies are offering varied outsourcing services such as BPO services, selling solutions, and consulting. Presently, the companies are acquiring customer leads through various data sources. Companies have dedicated sales executives to cold call these leads and pitch their services. The sales executives pitch all of their services without understanding customer needs, resulting in low success. The objective of this paper is to introduce the concept of revenue growth-profit margin matrix which can be used for prioritization and categorization of customer leads. Based on the revenue growth (%) and profit margin, we will be able to predict the needs of our customer. The sales executives can categorize the customer leads based on the type of service they might require and within that categories prioritize their leads. Categorization of leads will enable the sales executives to pitch only the services the customer might likely need. Prioritization of leads will enable the sales executives to give more importance to high priority customers. The internal market research team gathers data on revenue growth and profit margin and uses this for categorizing and prioritizing customer leads. Using this the sales team will be able to engage customers on specific services using open-ended inquiries. This will enable the company to differentiate itself from competition and get more attention from the customers. Furthermore, they can allocate more resources to the high priority leads. This model was tried in a leading US based BPO company with customers in mid-market segment with ×2.5 times better response rate. We are hopeful that it can be extended to the other larger market segments with similar results. However, we need to conduct the study and see if the effects of items like depreciation, initial revenue on the matrix before we can conclusively propose it for adoption.

Keywords: Business Process Outsourcing; Lead Categorization; Market Research; Analytical Framework; Customer Value Generation

Australian Academy of Accounting and Finance Review, vol 3, issue 2, April 2017, pp 50-57