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Mastering Information across Economic Cycles 161

% of Customers vs. Monthly Profitability

100% $9
80% $7
60% $5
40% $3
20% $1
0% -$1
-20% Very Profitable Profitable -$3
-40% -$5
-60% -$7
-80% -$9

-100%
% of Accounts Monthly Profit
($MM) % of Customers
Unprofitable Very
Unprofitable

Figure 7.7

How well the organization understands its profitability can
lead to new market opportunities. On the other hand, poor
profitability measures can allow certain internal groups to
cloak their poor business performance. One executive from
a leading UK bank suggested that several groups within his
organization developed great skill in hiding many poor
financial and operational performances in their P&L because
of the lack of detail and proper accountability.

Figure 7.7 shows a further evolution for a regional West
Coast US bank on the road to mastery. The picture of
profitability becomes clearer as well as the potential
for decisive customer initiatives. From this detailed infor-
mation, the organization can now target very specific
customer segments for retention initiatives. They can
also attempt to migrate these customers to higher levels
of profitability.

Table 7.1 reveals a view closer to the mastery level with
details revealing that only 0.19% of the customers were pro-
ducing $3,021,332 out of $5,544,285 total profits. This small
percent of customers shows just how vulnerable and depend-
ent organizations are upon these customers.