Sample Business Studies Essays On Customer Profitability

Homework Question on Managing Customer Profitability

  1. Importance of Managing Customer Profitability

Homework Answer on Managing Customer Profitability

Introduction

The concept of managing customer’s profitability is coupled by a number of issues. Customer profitability in itself is the quantitative measure of how much an individual customer or a group of customers contribute to the profit and other financial performance of a company, a firm and business. Any metric related to the customer in terms of their engagement to the business that incorporates financial outcomes such as cash inflows, cash outflows and business gains are included in the calculation.

Customer profitability generally gives the financial reliability to the better of business operations (Hutt, Michael, and Thomas 46). This type of business measure equally determines how far the business remains in operation and relevant to its course, defining the business. Studies on customer profitability have customer profitability develop along factors such as customer loyalty, customers’ lifetime and nature of mutual relationship between the customer and business owner.

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Body

The profit level of a company entirely depends on the existing mutual relationship between the customer and the business. The business should hence determine ways of keeping its customers through a proper customer profitability management. The profit level of a company entirely depends on the existing mutual relationship between the customer and the business. The business should hence determine ways of keeping its customers through a proper customer profitability management. The management of the business should hence acknowledge the importance of managing customer profitability.