Lifetime profitability should be the basis for deciding to retain or discourage a currently unprofitable customer.

Question

Quizplus · Accepted Answer

Lifetime profitability takes into account the total profits a customer is expected to bring over their entire relationship with a company, not just their current profitability. This approach recognizes that a customer who is unprofitable in the short term may still be valuable over the long term, making it a more comprehensive basis for decision-making regarding customer retention or discouragement.

Lifetime Profitability Should Be the Basis for Deciding to Retain