Technical Data:
Segmenting, analyzing, selecting, and totaling new customers are not exclusive tasks for companies in the growth or expansion phase. Even the most powerful companies on the market are forced to make decisions geared towards improving obtainment mechanisms, even if its consumer base is in the millions.
This is the case FedEx, the world’s largest messenger company, had to face a few years ago. It doesn’t seem like a firm with the capacity to operate in more than 200 countries, with a staff of more than 260,000 employees and contract employees, would need a plan to improve its customer obtainment strategy. However, an exhaustive analysis of the companies in its portfolio showed that, until then, they had not done the homework they should have done.
Analyzing its relationship with about 30 of its large accounts, FedEx discovered that a considerable part of them were not generating the initially expected revenue, especially those that had negotiated a high volume of residential deliveries. In this case, the problem was that the company had valued customer size above everything, and not customer value and capacity for lifespan. The result of this mistake was that FedEx treated companies with very different value returns at the same level and with identical resources.
The awareness of this situation led FedEx directors to modify the way they made offers to potential customers, and to take measures with those customers who had not met initial expectations. For those customers, it raised prices – in some cases very significantly – even at the risk of losing them, because their presence in the company resulted in revenue loss, a noticeable inefficiency in its own resource management and, moreover, an insulting comparison with truly profitable customers. Concerning the presentation of offers to new “prospects”, the company improved its segmentation, adjusting aspects such as discounts, sales, and available means for each customer profile.
In the last five years, FedEx hasn’t stopped growing exponentially in both revenue and net profits. In the last half of 2001, the company reported a 54% decrease in profits, but one year late it had turned the situation around with a growth of 109%, reaching 236 million dollars. In the last quarter of 2006, the firm raised its revenue to reach almost 8.5 billion dollars, with a net profit of 568 million dollars, more than double that of five years previously.
In the development of its new products and proposals, FedEx takes very much into account who it is best for them to target, and how to do it. This year, it launched its Critical Inventory Logistics Program, geared towards companies that need to manage their inventories more efficiently, taking advantage of the synergies among the group’s different companies, from those dedicated to parts and equipment transport, to those that deal with express deliveries. Assigning resources and optimizing the management of customer obtainment and maintenance are always the objective.