The Way to Manage Unprofitable Customers

1834 Words8 Pages
Companies always want to find customers and keep a good relationship with them. However, not all customers are profitable for companies. So what should companies do with unprofitable customers? It is not an easy decision. Some companies make an decision that stop providing the service to these unprofitable customers. It can be considered as a customer divestment strategy. In fact, divesting unprofitable customers is risky in some situations. To make right decisions, managers need to analyse the major characteristics of unprofitable customers then find the risks of divesting unprofitable customers. Unprofitable customers can be understood simply as people who bring nothing and even make bad debt for your company. This is not company’s desire because the most important thing for company is profitable. So, some companies have decided on a customer divestment strategy. This is the time for managers to consider carefully and appreciate the right customers . Based on the relationship and transactions with customers, managers will identify profitable and unprofitable customers. Obviously, one of major of unprofitable customers is they consume more resources than they pay for. They divert attention from a company’s profitable customers. In addition, they create tension between the sales team who is looking to generate revenue and management who is keeping an eye on profitability. These are the major characteristics of unprofitable customers that we can easily recognize. In some specific industries, unprofitable customers has always been a sore issue with the manager in particular and the company in general. In telecommunications industry, for instance, most of the companies providing internet services have own call center to work with and take care of their customer. There are many complaint calls everyday. In some cases, customers were calling customer care hundreds

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