CUSTOMER PROFITABILITY ANALYSIS: CHALLENGES AND NEW DIRECTIONS Summary This article presents the concept of modifying cost accounting system in order to provide measurements from a customer profitability viewpoint. Most management accounting systems focus on products‚ departments or geographical areas‚ which have little to do with customers. A questionnaire was sent to marketing managers and marketing controllers and interviews with respondents. Much of this article draws on qualitative responses
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CUSTOMER PROFITABILITY ANALYSIS Customer profitability analysis (CPA) can be defined as a method used to compare the costs of all the activities used to support a customer or a customer group with the revenue generated by that customer or customer group. It is the analysis of the revenue and costs that relates to the customers which can be determined by considering the similarities and differences in customers’ buying behaviours and customer preferences. From the definition‚ it shows three features
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Topic Gateway Series Customer profitability analysis Customer profitability analysis Topic Gateway Series No. 55 1 Prepared by Jasmin Harvey and Technical Information Service January 2009 Topic Gateway Series Customer profitability analysis About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition‚ a brief overview and a fuller explanation of practical application. Finally they
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A customer profitability analysis is an evaluation process that focuses on assigning costs and revenues to segments of the customer base‚ instead of assigning revenues and costs to the actual products‚ or the units or departments that compose the corporate structure of the producer. Approaching profitability from this angle can sometimes provide valuable insights into how each step of the process of designing‚ manufacturing‚ and ultimately selling a good or service incurs cost and generates revenue
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in determining the cost of serving customers and as a basis for evaluating the profitabilty of a specific customer or group of customers. Why is this important? Most managers agree that 80% of their profits come from the top 20% of their customers and most important‚ the bottom 20% of their customers are unprofitable. For example‚ to compete with Walmart‚Best Buy works hard to attract profitable customers and equally hard to discourage the unprofitable customers which those that are price shopping
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Starbucks: Just Who is the Starbucks Customer Starbucks was a young company in the 80’s‚ starting as a smaller chain where people could buy coffee in a nice comfortable environment. Starbucks located in Seattle there was some spectrum variables of this geographic location. The company deciding to move was a strategic decision. It did have to consider the full spectrum of segmentation variables. Considering the difference in the geographic location and the people in the different locations needs
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Starbucks: Delivering Customer Service Starbucks began several years ago in a small city in Seattle‚ WA. Since its inception Starbucks quickly acquired several cafes throughout the state of WA and now Starbucks has cafes worldwide. The success of Starbucks lies with the dedication of providing quality products‚ a unique atmosphere and a commitment of providing top notch customer service. This article describes the importance of customer service and the endless possibilities to make sure that Starbucks
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Group Assignment (Winter 2014) Pilgrim Bank (A): Customer Profitability Pilgrim Bank (A) is a case that analyzes customer profitability in a retail banking setting. It explores a business phenomenon common to the retail banking industry and‚ within this context‚ acquaints you with the types of managerial questions that can be made by data analysis. As a recently hired analyst‚ Alan Green (your group’s role) has data on a sample of customers and must make recommendations about whether the bank
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Importance of Analyzing Customer Profitability BADM 603 July 30‚ 2007 Every for-profit business has one main goal: to maximize profits by selling as much of its products or services to as many customers as possible. It seems logical to think that the more customers that a business has‚ the more profitable the company will be. However‚ business managers should also be aware that some customers are more profitable to the company than others. Managers should analyze their customers to determine those
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Cited: Jan 30‚ 2013 - Case Analysis ... Transcript of Starbucks: Delivering Customer Service. Statement of the Problem This study aims to identify possible solutions ... Dec 6‚ 2012 - Depending on your opinion‚ Starbucks is either the height of capitalism at work‚ or the ... Do your best to address every support case early.
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