Situation: A supplier of weather resistant barrier products desired to measure its customer strength tied to financial performance indicators as a true test of loyalty impact on its business.

Approach: Principia worked with the client to design a scoring system to correlate customer feedback with financial metrics. Over 500 interviews were completed with active distributor and dealer customers to determine the level of loyalty score, then tied to financial KPIs, including growth in annual spend, cost to serve, margin expansion and retention rate to determine the lifetime value of the client’s customer base.

Outcome: The client used the segmentation schemes developed from differences in lifetime value for each customer group to make customer retention and resourcing decisions. Net margin increased by nearly 20% within the first 2 years based on level of service and support provided to higher scoring accounts.