Summer 2013 | Capital Ideas
Manage a portfolio of relationships
THE CUSTOMER’S EXPERIENCE
Demystifying a calculation
ranslation: When trying to please a customer, tread carefully. The level of service you provide today will
impact the level your customer will want tomorrow. If you set expectations too high and can’t deliver the
next time, you will create an unhappy customer.
Chicago Booth Professor
and Adam Mersereau of the University of North Carolina developed
this model to help optimize decision-making when you have more demand than supply, and have multiple cus-
tomers to manage. Just as people can use spreadsheet models to decide how much capital to allocate to one
investment or another, they can use this model to understand how best to allocate limited resources to relation-
ships. The model does this by encoding behaviors that people understand and perform intuitively.