Analyses of customer profitability typically reveal that:
A) As few as 20% of customers yield 80% of a firm's total profits.
B) Most customers yield equal shares of a firm's total profits.
C) There is rarely an economic case to be made for abandoning a customer.
D) The largest customers as measured by revenue are the most profitable.

Question

Quizplus · Accepted Answer

The 80/20 rule, or Pareto Principle, often applies in customer profitability analyses, indicating that a small percentage of customers (around 20%) generate a large percentage (around 80%) of a firm's profits. This contrasts with the other options, which do not accurately represent typical findings in customer profitability analyses.

Analyses of Customer Profitability Typically Reveal That