Customer Profitability Analysis

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🔥NEW Customer Profitability Analysis
Devendra Vyavaharkar, Student (MBA), India, Premium Member
Should a firm focus primarily on the customers who are ready to pay a higher price? Are those customers the most profitable to the firm? Is that always the case? If not, how can firms overcome this bias? WHAT IS CUSTOMER PROFITABILITY ANALYSIS? INTRODUCTION Firms typically employ a or a to pricing their products and services. Usually it seems only logical that the customers (or 'accounts') who are willing to pay the highest price should be the firm's topmost priority. However one should keep in mind that the costs to serve each customer type often differ considerably, and hence their profitability also differs. So forms should not simply focus on the highest revenue yielding customers, but are better off understanding customer profitability before choosing target audiences. Customer Profitability Analysis (CPA) is a marketing and method, allowing businesses to determine the profitability of each customer or segments of customers, by attributing profits and costs to each cust (...) Read more? Sign up for free

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