Customer’s Profitability Analyses and Customer Service Policies

Journal of Innovations and Sustainability, Vol. 3, No. 3, 2017

10 Pages Posted: 16 Mar 2018

See all articles by Venelin Terziev

Venelin Terziev

Georgi Rakovski Military Academy, Sofia, Bulgaria

Banabakova Vanya Kuzdova

Vasil Levski National Military University

Marin Georgiev

Kaneff University Hospital

Date Written: December 31, 2017

Abstract

Most organizations do not pay attention to the customer's profitability. 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. Appropriate use of 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. The present study explores the opportunities of measuring customer profitability, analyzes the connection- service’ expenses, a cost-effective client and presents the application of the ABC method - analysis to distinguish the customer service policy.

Keywords: Customer, Customer Profitability, Customer Service’s Expenses, ABC-Analysis

JEL Classification: M30, M31

Suggested Citation

Terziev, Venelin and Kuzdova, Banabakova Vanya and Georgiev, Marin, Customer’s Profitability Analyses and Customer Service Policies (December 31, 2017). Journal of Innovations and Sustainability, Vol. 3, No. 3, 2017, Available at SSRN: https://ssrn.com/abstract=3138030

Venelin Terziev

Georgi Rakovski Military Academy, Sofia, Bulgaria ( email )

Sofia, 1000
Bulgaria

Banabakova Vanya Kuzdova

Vasil Levski National Military University

Veliko Tarnovo
Bulgaria

Marin Georgiev (Contact Author)

Kaneff University Hospital ( email )

Rousse
Bulgaria

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