There appears to be a growing tendency for companies to seek a competitive advantage by applying customer-focused strategies. This customer focus is evident from a number of companies including customer orientation in their corporate mission statement. 

1). Explain the concept of customer profitability analysis. Give examples of cost drivers used in this analysis 

2). How does the lifetime analysis differ from the basic customer profitability approach? Explain 

3). Show reasons why might an organization choose to keep an apparently unprofitable customer. 

4). Should the company in its customer profitability analysis use an activity-based costing approach or traditional product and service costing approaches. Explain the reason behind your answer.