Significance Of Customer Portfolio Management In Modern Business Envir Essay

Significance Of Customer Portfolio Management In Modern Business Environment - Essay Example A loyal customer is an invaluable asset to any organization that contributes to the accomplishment of the firm’s long-term goals and objectives. Scholars reflect that efficient customer portfolio management at different levels of an organization is a fundamental driver of strategic as well as financial success. The concept of customer portfolio can significantly contribute to the firm’s efforts to retain the profitable segments of its customers because customer portfolio is a potential way to achieve enhanced customer satisfaction. According to experts, â€Å"in much the same way that we can examine a portfolio of products or brands, the importance of customers as assets and investment centers mandates a similar portfolio analysis† (Hooley, et al. 2008, p.436). This paper will explore the concept of customer portfolio management. The paper will also discuss how a company can apply this concept in its strategic management.  The term portfolio is often used by ma nagement professionals in the context of investments to represent the collection of assets owned by a person or an institution. With regard to customers, this term has a parallel meaning. A customer portfolio can be defined as â€Å"the collection of mutually exclusive customer groups that comprise a business’s entire customer base† (Buttle, 2009. p.125). In simple words, a customer portfolio encompasses different groups that make up a business’s customer base. For instance, Coca Cola’s customer portfolio comprises grocery stores, amusement parks, and restaurants. The thorough analysis of customer portfolios can assist a company to identify how a specific customer group is performing.