Customer profitability

Strategic Direction

ISSN: 0258-0543

Article publication date: 23 May 2008

Keywords

Citation

Murby, L. (2008), "Customer profitability", Strategic Direction, Vol. 24 No. 7. https://doi.org/10.1108/sd.2008.05624gad.004

Publisher

:

Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited


Customer profitability

Article Type: From: Strategic Direction, Volume 24, Issue 7.

MurbyL. Financial Management (UK), February 2008, Start page: 32, No. of pages: 2

Purpose - To put forward a method of managing customer value. Design/methodology/approach - Illustrates and discusses the customer profitability management cycle used in a management accounting guideline booklet published by the professional institutes in The UK, USA and Canada and recommends customer segmentation by profitability. Explains that this depends on the margin, lifetime value and impact of the customer, shows how to measure all three and lists the types of measures needed in a management system. Points out that if the information is not readily available from existing systems, rough estimates can still be valuable for managers; and that incentive/reward schemes should align with customer profitability strategies. Originality/value - Clearly explains the basics of customer profitability management .ISSN: 1471-9185 Reference: 37AE100

Keywords: Corporate strategy, Customer information, Management information, Profit maximization