Business

The equation: How to manage a portfolio of relationships

Dan Adelman explains how his model helps allocate limited resources to relationships

     

From: Magazine

Translation: 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 Dan Adelman 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 customers 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 relationships. The model does this by encoding behaviors that people understand and perform intuitively.

Relationships p44

Read the accompanying article »