Cost to Serve and Customer Selection

Wing Sun Li
Additional contact information
Wing Sun Li: Beijing Normal University–Hong Kong Baptist University

Chapter 4 in Strategic Management Accounting, 2018, pp 57-74 from Springer

Abstract: Abstracts This chapter explores strategic issues in managing customer performance. First, it examines why large firms failed to implement cost-to-serve (CTS) policy for customer accounts and the consequence of CTS mismatch on the corporate performance. Second, it illuminates the necessity to separate customers by value contribution to the firm (i.e., customer clusters). Third, it discusses new rules for customer selection and resource allocation. A new tool of customer performance management grid (CPMG) is introduced which links CTS to customers by value contribution. Management can make use of this new tool to establish pricing and CTS policies based on customer clusters (i.e., CP/CTS ratios). Furthermore, management can examine business potentials and customer compatibility between the target customer and the firm to decide action strategies for customer investment. To integrate total customer performance management, sale performance monitoring system which links customer clusters, customer fit, and customer investment is discussed.

Keywords: Cost to serve; Customer selection; Customer clusters; Customer performance management; CP/CTS ratios (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-981-10-5729-8_4

Ordering information: This item can be ordered from
http://www.springer.com/9789811057298

DOI: 10.1007/978-981-10-5729-8_4

Access Statistics for this chapter

More chapters in Management for Professionals from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().