Analyzing Customer Profitability

Despite enormous variations in profitability, many companies continue unprofitable relationships with customers, often providing them with pricing and service levels identical to those received by the most profitable ones. Why? In most cases, companies simply do not know who the unprofitable customers are.
By analyzing customer profitability, marketers get insight into which customers to target and where to allocate and concentrate their marketing budgets and how to plan and manage marketing and sales strategies.
In this lesson, you will learn how to carry out an analysis of your customers and product sales to identify the most profitable customers, and the nexus of products and customers which will deliver the most return on your marketing spend.