Don’t Keep It Too Simple, Stupid
The Need for a Segmented Approach
The more intelligence one has the more people one finds original. Com-
monplace people see no difference between men.
Blaise Pascal (1623–62)
A major supplier of commercial foreign-exchange services was concerned that the possible adoption of the euro by the UK government might have a catastrophic effect on its business. What could the company do that would enable it to quantify the threat that the single currency posed? How could it manage its business profitably if its primary source of income were eradicated at a stroke by forces outside its control?
At first glance the picture did indeed look serious – and potentially terminal. Its customer base comprised exclusively UK businesses, the vast majority of which were trading with companies based in countries that had joined the single currency or were forecast to do so. Customer attrition was not measured but was believed to be growing rapidly; and the average transaction value appeared to be decreasing. However, customer purchase and value analyses revealed an interesting picture that enabled the company