Which of the following statements about profitability analysis is true?
A) Cross- selling refers to selling unprofitable products to profit- making customers.
B) Very profitable customers rarely need much attention.
C) Companies might benefit from encouraging unprofitable customers to switch to competitors.
D) Companies should never raise prices on unprofitable products.
E) all of the above

Question

Quizplus · Accepted Answer

While the other statements are false, companies may indeed benefit from encouraging unprofitable customers to switch to competitors. These customers are consuming resources without contributing to profits and redirecting them to a competitor can free up resources to be used on more profitable customers.

Which of the Following Statements About Profitability Analysis Is True