“A customer-profitability profile highlights those customers a company should dr
ID: 2459703 • Letter: #
Question
“A customer-profitability profile highlights those customers a company should drop to improve profitability.”
"detailed study is important and customer profitability analysis is not the only tool that you will follow to drop the customers! Is it correct? &
Are all the customers are important? What do you think about the loyal customer & a normal walk-in customer? Can you convert a normal customer to a loyal customer? If you have time please also Mention a company that has the capacity to do convert normal customer to a loyal customer?
Explanation / Answer
A customer-profitability profile highlights those customers who are not loyal to the company, so the company should drop those customers to improve the profitability of the company.
The customer's profitability shows that the customer are irregular, so not loyal to the company. Thus the improvement of the company's sales is not dependent on such customer.
The company should go in detail study of the customer which involves the satisfaction of the customer, total requirement of the company's product to the customer, alternative sources of fulfilling the requirement of the customer etc.
The company should go for the said study for its all customer because each and every customer is important to the company. The company should locate the customer who are giving repeated order and making timely and good payments.
The new customers are in the initial stage to be the loyal customer of the company, so company provide good services to the customer so that the new incumbent become the permanent and loyal customer to the company. Knowing the requirements of the customer and its business challenges and the profitability margin will help the company to know the customer and serve them better.
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