Last time, we discussed how important it is to manage sales at the EBITDA level. Now, arrange these customers in profitability order as a WHALE curve, and you’ll see where your company’s profits are disappearing.
The shape of the curve varies between companies, but the message is the same – a significant portion of customers are unprofitable.
So how do you flatten the curve and shorten the tail?
Divide the curve into three parts for analysis:
1. Profitable customers (rising part)
-> Sell more, reward, and expand offerings
2. Break-even customers (the whale’s back)
-> Engage through benefits and bundle offerings
3. Unprofitable customers (declining tail)
-> Turn them profitable or let them go
A business with more profitable customers becomes a more profitable business.