Capabilities
A surprising number of organisations cannot answer, with confidence, what it actually costs them to serve a given customer, product or channel. Averages hide the truth, and the truth is usually that a portion of the business is unprofitable and subsidised by the rest. Cost to serve analysis makes.
PEF Consulting Partners reduces cost to serve from operational experience, including prepayment and customer operations work with E.ON Next during its Kraken transformation, where cost to serve was the measure the platform had to move.
Allocating the true cost of serving each customer segment, product and channel, rather than relying on averages that flatter some parts of the business and unfairly penalise others.
Identifying where you are losing money, or making far less than you thought, and why. Often it is a small number of segments or a particular way of serving that quietly drags on the whole.
Turning the analysis into decisions: which segments to serve differently, which to reprice, which channels to shift, and where to stop. Analysis that does not change a decision was not worth doing.
Blended margins tell you the business is healthy overall while concealing that a meaningful slice is loss making and cross subsidised. That hidden subsidy shapes decisions badly: you invest in the wrong customers, price the wrong way and defend the wrong revenue. Cost to serve replaces the comforting average with the uncomfortable and useful detail.
Usually enough to start. The analysis rarely needs perfect data to reveal the big patterns, and part of our work is being pragmatic about what the available data can support while being honest about its limits.
Act on them, through pricing, channel strategy, service design or, sometimes, deciding to serve certain segments differently or not at all. We help translate the findings into those decisions.
Strategy and customer, customer experience design, or get in touch.
We bring senior people who have delivered exactly this at scale. Honest advice, and accountability for the outcome.