<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Marketing is an art to attract and retain customers, but not to any but profitable customers. Unfortunately, organizations often understand that 20 to 40 percent of their customers are unprofitable. Also, many organizations report the fact that their most profitable customers are not the ones who buy the most, but the average shoppers. Major customers require special service and get the biggest discounts, thus reducing the company's profits. The smallest customers pay the full price and get a minimum of service, but the expenses connected with the deals reduces the profitability they earn. Average customers enjoy good service, pay almost the whole price, and in many cases prove to be the most profitable. Therefore, a number of large organizations, which initially target only large customers are then orientated towards the average customer market. An organization should not pursue and satisfy every client. Orientation should be to cost-effective customers. This in turn requires the definition of a "cost-effective customer". The present study explores the possibilities for measuring customer profitability, analyzes the connection- service’ expenses, a cost-effective client and presents the application of the ABC method - analysis to distinguish the customer service policy</p></abstract>

Marketing is an art to attract and retain customers, but not to any but profitable customers. Unfortunately, organizations often understand that 20 to 40 percent of their customers are unprofitable. Also, many organizations report the fact that their most profitable customers are not the ones who buy the most, but the average shoppers. Major customers require special service and get the biggest discounts, thus reducing the company's profits. The smallest customers pay the full price and get a minimum of service, but the expenses connected with the deals reduces the profitability they earn. Average customers enjoy good service, pay almost the whole price, and in many cases prove to be the most profitable. Therefore, a number of large organizations, which initially target only large customers are then orientated towards the average customer market. An organization should not pursue and satisfy every client. Orientation should be to cost-effective customers. This in turn requires the definition of a "cost-effective customer". The present study explores the possibilities for measuring customer profitability, analyzes the connection- service’ expenses, a cost-effective client and presents the application of the ABC method - analysis to distinguish the customer service policy

Effective Options for Determining Customer Profitability

International conference KNOWLEDGE-BASED ORGANIZATION

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Effective Options for Determining Customer Profitability"}

Marketing is an art to attract and retain customers, but not to any but profitable customers. Unfortunately, organizations often understand that 20 to 40...

Effective Options for Determining Customer Profitability

Online veröffentlicht: 26. Juli 2018

Seitenbereich: 123 - 128

DOI: https://doi.org/10.1515/kbo-2018-0076

Schlüsselwörter
customer, customer profitability, customer service’s expenses, ABC-analysis

© 2018 Venelin Terziev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Effective Options for Determining Customer Profitability

Online veröffentlicht: 26. Juli 2018

Seitenbereich: 123 - 128

DOI: https://doi.org/10.1515/kbo-2018-0076

Schlüsselwörtercustomer, customer profitability, customer service’s expenses, ABC-analysis

© 2018 Venelin Terziev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Schlüsselwörter
customer, customer profitability, customer service’s expenses, ABC-analysis