Customer Profitability Analysis

   

Definition: Customer Profitability Analysis (CPA) is a marketing and management accounting method, allowing businesses to determine the profitability of each customer or segments of customers, by attributing profits and costs to each customer or segment separately.

CPA can be applied at the level of customer aggregates / groups / segments or even at individual customer level (most time consuming, but providing a very precise understanding of a business situation).

Firms should not simply focus on the highest revenue yielding customers, but are better off understanding customer profitability before choosing target audiences.


   
   

More on financial management: Accounts Receivable Factoring, Credit Management, Credit Rating, Debt Settlement, Investor Relations, more...

You may also like: Full-time MBA, Executive MBA, Executive Education, Online MBA.


MBA Brief offers concise, yet precise definitions of concepts, methods and models as taught in a study Master of Business Administration.

We like to keep things short, and provide links to learn more about your subject.


Add MBA Brief to your desktop / iPad
   

© 2023 MBA Brief - Last updated: 31-5-2023  -  Privacy   |   Terms