Question
As companies shift from a product-centric focus to a customer-centric focus, a myth that almost all current customers are profitable needs to be replaced with
As companies shift from a product-centric focus to a customer-centric focus, a myth that almost all current customers are profitable needs to be replaced with the truth. Some high-demanding customers may indeed be unprofitable! Heres the basic problem. With accountings traditional product gross profit margin reporting, managers cant see the more important and relevant bottom half of the total income statement pictureall the profit margin layers that exist and should be reported from customer-related MSDA expenses. Based on your new knowledge on measuring customer profitability, what other considerations should a company look at when measuring customer profitability?
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