Which of the following statements is $\bold{FALSE}$ regarding the use of the 80/20 rule in managing customer relationships?
A) Advances in technology and data collection techniques allow firms to profile customers in real time.
B) Twenty percent of customers provide 80 percent of business profits.
C) Some customers are too expensive to keep given the low level of profits that they generate.
D) The 80 percent of customers in the bottom tier should be fired so the firm can focus on its top customers.
E) The firm's top customers are the most obvious candidates for retention strategies.

Question

Quizplus · Accepted Answer

The statement that "the 80 percent of customers in the bottom tier should be fired so the firm can focus on its top customers" is a misinterpretation of the 80/20 rule. The rule suggests that 20% of customers provide 80% of business profits, but does not imply that the other 80% of customers should be fired. Instead, the goal is to identify the top customers and focus on retaining and satisfying them while still maintaining a certain level of service for all customers.

Which of the Following Statements Is FALSE\bold{FALSE}FALSE Regarding the Use of the 80/20 Rule in Managing Customer

Which of the Following Statements Is $\bold{FALSE}$ Regarding the Use of the 80/20 Rule in Managing Customer