Customer Profit

Chapter 15: Managing client client positiveness; increase profitability; emulous strategy; service firm Customer profitability Customer profitability derives from the deviation between grosss earned from and the greets associated with the guest relationship in a specified period. It can be defined when the constitute of all the activities apply to support client against with the revenue generated by that guest. The activities used to support customer is called customer driven activities. Customer driven activities may relate to marketing and selling, packaging, order entry, lade and shipping goods, invoicing and collecting sales revenue, technical and administrative support, and afterwards sales service. With customer address analysis the comprise of product purchased by the customer atomic number 18 assigned to customer, along with the cost of any other customer driven cost. Analysis of the cost of activities at each level devoted to serving particularized customer is called customer costing. Combining customer costing with revenue earn from customer will derive customer profitability analysis. Customer profitability analysis is a comparison of the be of all the activities used to support a customer or a customer group with the revenue generated by that customer or customer group.

Activity based costing technique can be used to determine the profitability of customers. Customer can be identified as a cost objects and activity based costing can be used to estimate the cost of doing business with particular customers or with groups of customers that control similar service levels. In determining customer profitability, it is normally not practical to identify the profitability of individual customer, unless thither are only a few of them. Therefore customer may be grouped by size, industries, and market or distribution channel. The reasons we need to calculate customer profitability are: 1. The Customer profitability will help to determine which customer generates the... If you want to get a full essay, order it on our website: Ordercustompaper.com

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