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How to Apply the 80/20 Rule to Your Business

  William K. Thorpe, Partner, CFO Edge, LLC  
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  Article Summary  
Applying the 80/20 rule to profitability and customer segments, conventional wisdom has it that 80 percent of an organization’s profits are derived from 20 percent of its clients.

Successfully applying the 80/20 rule is grounded in clear identification of profitable customers, and - with this identification - it becomes possible to align strategies and resources in ways that enhance customer service and customer satisfaction for the most profitable segments.

Reviewed in this article are both the types of objective data and the subjective factors requiring analysis in order to determine profitable customer segments.

As they undertake a profitability review of their customer segments, executives leading Los Angeles and Southern California companies can benefit from talking with a provider of CFO services.

A former enterprise CFO brings to the discussion a proven track record identifying, accessing, and leveraging the right data sources; assessing hard and soft costs of customer segments, and recommending new ways to work with segments to improve both profitability and customer satisfaction.

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