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This document illustrates how municipalities can use customer profiling and activity based costing methods together to better understand their customers, to successfully market to those
customers, and to generate efficiencies by fully understanding the costs of service delivery.
Customer Profiling is a technique used to segment customers by socio-economic groups, which gives an indication of their likely behaviour and service and lifestyle preferences.
Activity Based Costing (ABC) is the technique used to calculate the true cost of delivering a service via different delivery channels by analysing the activities that are involved in service delivery. Using business improvement methods with the ABC data can also help identify how activities can be made more productive and improve the customer experience.
This report uses Council Tax payments and Library Services as examples to illustrate the application of Customer Profiling and ABC.