Registration is now open for the Missouri Technology Expo 2011 held on September 8, 2011 in Columbia, MO. The Expo will feature exciting and promising inventions developed at universities throughout Missouri and be a catalyst for economic development.

You can find information regarding registration and other details at:

tmir.missouri.edu/mte2011.

If you or your clients are looking for capital, don’t miss the Missouri Venture Forum event “Getting $$$ from Angel Investors” on Thursday, May 19 from 4-7 pm. The event features five speakers followed by a Q&A session.

This event is a must make for anyone seeking funds to take their business to the next level or for those planning a fund-raising round. Register now to take advantage of the knowledge and insights of this panel of experts. Again, it’s this Thursday so sign up and forward this message to anyone you know that needs capital.

Date: Thursday, May 19

Time: 4:00-7:00 p.m. includes open bar and hors d’oeuvres

Place: Sheraton Clayton Plaza, 7730 Bonhomme, Ave., Clayton, MO 63105

Cost: $32 members, $40 nonmembers

Register: For more details and to register go to www.MissouriVentureForum.org or call 314-241-2683

Thanks and call with questions.

Judy Meador

Association Manager
314-241-2683

Judy@MissouriVentureForum.org

Customer Segmentation

Simple steps for big returns

Summary:

Customer segmentation is done for many reasons.  Some of the more common reasons are:

1. Targeted marketing
2. Profitability to the business, or
3. To allocate resources to the customers that provides the most potential for increased profitability.

As you can see, the main focus is on efficiency, understanding who pays the “bills” or who will pay the bills in the future.  Customer segmentation is a method of analyzing the front end of the business.  It must be done objectively and without bias.  Should the owner want to give preference to an unprofitable customer that is certainly their right.  However, it is done consciously by the owner or manager.

This is by no means an exhaustive explanation of the process of segmenting customers.  It is designed to begin to show the process of how to allocate costs and then use that information to make informed decisions about the level of service given to individual customers.

Costs to consider:

Every business is the same when it comes to accounting for profitability.  Both direct and indirect costs must be accounted for to get a true picture of customer profitability.  It is important for the business owner / manager to have a good method of applying both types of costs.

Direct Costs:

Most business owners / managers do not struggle with the direct costs associated with a customer.  It is all costs that are directly attributable to a product or service.  It is the Cost of Goods Sold or Cost of Goods Available for sale (retail).  Sale Price – Direct Costs is the definition of gross margin for any business.

Indirect Costs:

There are many methods of allocating indirect costs to a particular customer or service.  It really depends on the type of business, their accounting system and the level in which they plan or budget for a given time period (year, quarter, etc.).  I will describe four of the more common types of allocations that I have used in the past.  All of these boil down to the same thing, a method of allocating costs to some sort of unit of measure. (more…)