Customer profitability analysis in support of strategic decisions

Pitcher, G.S. ORCID: 0000-0002-0804-7909, 2013. Customer profitability analysis in support of strategic decisions. In: British Accouting and Finance Association (BAFA) Northern Group Annual Conference, Nottingham Business School, Nottingham Trent University, Nottingham, 9-10 September 2013.

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Abstract

Purpose
The purpose of the paper is to explore the extent to which the management accounting technique of customer profitability analysis can be utilised to support strategic decision making within organisations.
Method
The analysis is based on participative observations supported by key informant interviews within four separate organisations. The use of multiple case studies enables a range of customer relationships to be explored.

Findings
A variety of measures are used in practice to ascertain the relative profitability of customers. There is evidence that customer profitability analysis supports strategic decisions. There is a strong link to marketing strategy and customer development and as a consequence customer profitability analysis can provide insight into resource allocation and long term planning.
Limitations
The four cases selected were based on existing contacts of the author and were selected because of the knowledge of their use of customer profitability analysis.
Practical implications
The findings highlight areas where customer profitability analysis can provide valuable insight. However, the development of customer profitability analysis as a regular reporting tool has implications for the design of management information systems to ensure that it can be undertaken cost effectively.
Originality
The use of multiple case studies covering a range of customer relationships indicates the variety of analysis that can be deployed to support strategic decision making.

Item Type:	Conference contribution
Creators:	Pitcher, G.S.
Date:	September 2013
Divisions:	Schools > Nottingham Business School
Record created by:	EPrints Services
Date Added:	09 Oct 2015 09:41
Last Modified:	09 Jun 2017 13:08
URI:	https://irep.ntu.ac.uk/id/eprint/1167

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