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Business, 04.03.2020 16:09 dancekb2

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! Hereā€™s the basic problem. With accountingā€™s traditional product gross profit margin reporting, managers canā€™t see the more important and relevant ā€œbottom halfā€ of the total income statement pictureā€“all 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 in measuring customer profitability?

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