What is a profitable customer?
The profitable customer is any client for whom the sources used to obtain and maintain their business will exceed the profits of this business. In order to determine whether the client is really profitable, many different factors must be taken into account, including the costs of sales efforts, commissions paid from the income generated by the customer and wages, time and equipment spent to maintain customer service and support. It is possible for a profitable customer to become unprofitable over time, especially in situations where the volume of business is reduced and the client requires more attention.
Many sellers will consider the potential profitability of the customer before the first contact. This involves qualifying in front as a means of developing an idea of what the customer needs, the level of income that can be generated, and the customer's potential requires more than the average part of the buyer and the service after the sale is complete. If the expected return on time and invested resources indicated that the supplier would be BDuring the life of the relationship small and no profit, there is a great chance that the seller will decide not to start contact and focus on other opportunities.
Even a new client who becomes a profitable customer can eventually become a financial responsibility. This happens most often when the customer does not pay out of outstanding invoices or requires requirements that lead to additional costs in providing goods or services to this client. If the profitable customer no longer creates at least some kind of return, the provider must consider the consequences of the interruption of the relationship versus its maintenance and decide which access is in the long -term interest of the company.
Many of the rear expenditure to maintain profitable Estate E is associated with the provision of quality customer service. The Provider must know how to handle customer complaints, relate to the perception of customers related to a particular problem, to operate the ActAznická centers that allow the client to obtain information or voice concerns at any time, and generally keep this client happy and promoted customer loyalty. Given that the best effort for customer service can cost a lot, it is important to ensure that revenues from customers who use these resources are sufficient to make efforts useful.
Although it is relatively easy to determine the amount of cash return that the customer generates, it is sometimes more complicated to measure the indirect benefits that are obtained from the relationship. For example, even if the client does not have to generate large income from his orders, he or she actively promotes the provider and product line with other types of customers who use similar products. As a result of the tpropagation of hats, these businesses eventually become clients and create additional income. If the relationship is interrupted, the provider will lose a valuable oral word that can significantly slow sales growth.