The Construction of a Segmental Customer Profitability Analysis

Abstract

This paper presents the construction of a geographically segmented Customer Profitability Analysis (CPA). The CPA was developed as a unique solution to a managerial problem: are there differences in the profitability of customers living in different geographic segments? The construct presented here applies the principles of activity based costing and an innovative segmentation model. The results were derived from a case study applying the constructive research approach in an Australian Telecommunications company.