The risks of customers are quantified uing heat maps and risk profiles. Adding a stressing customer to a stressed employee is a recipe for burning fire

1. Customers’ Risk Maps Ali Anani

2. To Juao Maya I dedicate this presentation to Juao Maya, who is a virtual friend. His comments reveal his inner positive emotions and first class thinking

3. The Risk of Customers This presentation attempts to draw attention to the risk of customers on the organization by drawing risk maps

4. Risk Risk is defined by the equation Risk Severity = Impact of Risk*Frequency of Risk Can we extend this equation to accommodate customers’ risk?

5. Risk Mapping To visualize the risks from customers we opted to put risks factors on a grid and a monograph

6. Risk Mapping- 2 Not all customers are the same. Some customers do not visit you frequently; yet they spend a lot without being demanding. In contrast, frequent customers might be very demanding and less profitable

7. Gerald Nanninga Observation This observation was supported by a recent elegant post by Gerald Nanninga. He observed that heavy users are not necessarily your best customers. Their activity tends to make them more demanding and more likely to leave. By contrast, the lazy customer may buy less, but be more profitable to serve and less likely to leave.

8. My Comment on Nanniga’s Post This post is a sheer beauty. Slow, but steady customers are more profitable than hasty and riskier customers.I enjoyed the Kellogg example. It fits beautifully with the value-laddering technique that promotes heart-moving approaches. Dispensing with the double-coupon strategy and replacing it with the targeted strategy of approaching lazy customers by offering them fast check out service is a timely shift. Address profitable customers by fulfilling their emotional needs is the strategy to go for.

9. The Impact Dimension Several factors influence the impact of a customer His lifetime value His influence (how much of an influencer he is) Intangible value- how many people would turn into customers following the customer’s advice His “table bill” on each visit Fast or slow customer

10. Customers’ Risk Maps Probability of Default Frequency of Visits Projected Consequences Separating Line Risk Score Assuredly Possible Very High Risk Rare Reasonably Possible Disastrous Infrequent High Risk Slightly Possible Very Severe Irregular Extensive Risk Unlikely Possible Severe Frequent Evident Risk Slightly Impossible Significant Incessant Nearly Impossible Evident Mild

11. Risk Customers’ For Lazy Customers Probability of Default Frequency of Visits Projected Consequences Separating Line Risk Score Assuredly Possible Very High Risk Rare Reasonably Possible Disastrous Infrequent High Risk Slightly Possible Very Severe Irregular Extensive Risk Unlikely Possible Severe Frequent Evident Risk Slightly Impossible Significant Incessant Nearly Impossible Evident Mild

12. Risk Customers’ Maps for Active Customers Probability of Default Frequency of Visits Projected Consequences Separating Line Risk Score Assuredly Possible Very High Risk Rare Reasonably Possible Disastrous Infrequent High Risk Slightly Possible Very Severe Irregular Extensive Risk Unlikely Possible Severe Frequent Evident Risk Slightly Impossible Significant Incessant Nearly Impossible Evident Mild

13. Heat Maps Denis suggested that one of the best ways to visually represent risk is to use a Risk Heat Map. Denis suggested that one of the best ways to visually represent risk is to use a Risk Heat Map. In this map, vertical axis represents the probability of a given risk occurring. Horizontal axis depicts the impact that the risk will have on the project or program should it materialize. See the next slide- the assigned color of risk may change depending on the risk appetite of the management

14. Customers’ Heat Map

15. Risky Employees Risky employees are among the most significant liability for a company but are among the hardest risks for a firm to identify and manage. A risky employee dealing with a high-risk customer is an ingredient for burning fire Read more: http://www.jamaicaobserver.com/business/Manage-risky-employees-or-lose-millions_8241741#ixzz1NcEoaMKR

16. In Summary Risky external customers might trigger the stressed internal customers to misbehave; the risk of losing customers increases sharply As the impression of first visits are impacting, demanding customers might draw high risk by antagonizing the employees serving them It is extremely important that employees with the right profile deal with difficult customers