Customer Profitability Analysis

Customer Account
Profitability Analysis

,Why Customer Profitability Analysis?
• Each rupee of revenue does not contribute
equally to profit.
• Profitability depends not only on the unit cost
of the product or service, but also on the
back-end services required, including
marketing, distribution and customer service.
• To budget for and track the profitability of
customers over the extended period of time is
a challenge for customer profitability analysis.

, Revenue Differences


Revenue differences across customers of a company
arise from sources including:
• Differences in the prices charged per unit to different
customers.
• Differences in the selling volume levels across
customers.
• Differences in the products or services delivered to
different customers.