Most marketers have heard or even quoted John Wanamaker’s assertion, "Half the money I spend on advertising is wasted; the trouble is I don’t know which half." Here is a not-so-old adage for your consideration:
 
All the resources I continue to invest in an unprofitable account compound the loss; the trouble is I don’t know when the account became unprofitable.
 
When the economy was growing a number of organizations began to look more closely at customer profitability initiatives in order to determine which accounts were actually profitable and which should be eliminated. Today’s economic retreat has created a customer shortage as consumers have cut back their spending. As a result, customer experience improvement initiatives that are designed to retain all current customers now seem more in fashion.
 
I’ll have to admit that the idea of eliminating any customers – particularly in an economic downturn - seems counter intuitive. After all, what company wants to retire a revenue producing account? As we know, profitability does matter, and in most industries unprofitable customers are those who do three things: they order rarely, they pay slowly or not at all, and they make unreasonable demands.
 
Read the entire CustomerThink article.