Browse MBAs SECTION 2: Managerial & Cost Accounting

The Customer Profitability Analyzer

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The Customer Profitability Analyzer

Analyse which customers or segments are actually profitable to serve.

Customers/segments with revenue: [PASTE]
Cost-to-serve factors: [DISCOUNTS, SERVICE TIME, RETURNS, PAYMENT SPEED,
SUPPORT LOAD]

Provide:
1. Gross margin by customer/segment
2. The cost-to-serve adjustments that change the picture
3. Net profitability by customer/segment after cost-to-serve
4. The "expensive to keep" customers and the quietly profitable ones
5. Options for the unprofitable ones — reprice, re-scope, or release

The insight I'm after: revenue size and profitability are often
unrelated — show me where they diverge here.

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