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  • Writer's pictureAmy

Tracking Customer Profitability

CRM QuickBooks Shopify Evernote

What does it mean when people talk about “customer profitability”? In short, it indicates the ratio of effort-to-profit for each customer. Customers who demand more time and attention (or resources) are typically not as profitable as customers who need less. Customers who freely give high praise on social media are more profitable than customers with smaller social media footprints. Customer profitability is also dependent on the relationship you build with them.

So, how do you track customer profitability? There are a lot of apps and software designed to track customer relationship management (CRM). NerdWallet published a great list of CRM apps covering accounting and finance, communication, time management, payment, and organization.

If you are like me, it’s hard to wrap your head around another app in your business arsenal. I decided to leverage my existing infrastructure to track customer profitability. I use Quickbooks, Shopify, and Evernote to manage my business. Currently, these platforms give me enough information to make decisions on which customers (and vendors) increase my bottom-line and which ones I need to let go.

QuickBooks pack a lot of punch into their products. QuickBooks Online (QBO) is cloud-based which makes it even better. Updates are invisible to the user and, best yet, your accountant can work on your account while on vacation in the Caribbean. All updates are real-time.

Job costing, customer reporting, and payment detail capabilities help you identify profitable customers and vendors at the push of a button. The number of reports depend on the product you purchased so look closely at the product comparison. The one thing I hear the most is that business owners want the cheapest option. Sometimes upgrading to a more expensive (but still affordable) plan can save hundreds or thousands when you use the QBO capabilities to your advantage.

Quickbooks uses Apps to connect your different sales, CRM, and marketing platforms.

Shopify’s process for setting up a retail store is super easy. I set aside an entire weekend for learning how to create my store and found that it only took a couple of hours. It took longer to find vendors than it did to set up the store.

Shopify also gives you the ability to capture customer information and create targeted marketing programs to reward repeat customers or people who spend a minimum amount on your products. Use newsletters or discounts to encourage customers to return more often and spend more money. Like QuickBooks, Shopify leverages apps and interfaces with a variety of programs. I connected Shopify to QuickBooks to import sales information. This saves time since I don’t have to enter sales data again in QuickBooks and it also reduces the risk that I will key it in wrong.

I don’t use Evernote to track customer profitability. However, it is essential to capture customer details quickly, in one place, and make it available across all devices. I also use it to capture content marketing ideas and examples. I like to think I will remember important people or great ideas but my memory is not a steel track and paper gets lost (or eaten by the dog … I’m not making this up).

Evernote, like QBO and Shopify, is cloud-based so anyone on your team can use it, contribute, or act on it immediately. Just send a quick message that you have added something to Evernote and your employees can pull it down.

These are the tools I’ve used to manage customer and vendor relationships. There are tons more on the market and some work better than others. What tools do you use to track customer profitability?

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