University of agribusiness and rural development, UARD Jubilee International Scientific Conference

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Models For Analyzing Customer Profitability
Vanya Banabakova

Last modified: 2018-02-13


Marketing is an art to attract and retain customers. Unfortunately, organizations often understand that 20 to 40% of their customers are unprofitable. It is also appropriate to improve this activity by first applying a model of customer profitability analysis. One of the basic principles of customer return analysis, which the provider must implement, is to disclose and describe all the expenses, specific to each individual customer. A useful way to uncover these costs is to determine which expenses will be dropped if the customer is discontinued. ABC is a differentiation analysis to identify which goods and services, which customers are more and which are less profitable for the organization, and depending on how to define the policy for serving different categories of customers and the sale of goods and services with different participation in sales and profits. Present study explores the models for measuring customer profitability and presents the application of the ABC method - analysis to distinguish the customer service policy.


customer, customer profitability, customer service’s expenses, ABC-analysis


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