Phuong is a customer of PVL Corporation. She consistently orders low-margin products, but requires costly services from PVL. In employing ABM techniques to manage customer profitability, PVL's staff should:
A) Make no changes in service to Phuong
B) Develop creative approaches to managing Phuong as a customer
C) Require Phuong to pay for all orders in cash
D) Classify Phuong as a value-added customer and increase the amount of services provided to her

Question

Quizplus · Accepted Answer

PVL's staff should develop creative approaches to managing Phuong as a customer. ABM is a technique that aims to identify and manage the costs of products or services provided to customers. In this case, Phuong is ordering low-margin products but requiring costly services, which means that she is not a profitable customer for PVL. However, PVL should not simply make no changes in service to Phuong or require her to pay in cash. Instead, they should try to find ways to increase Phuong's profitability by developing creative approaches to managing her as a customer, such as offering her bundled packages or incentivizing her to order higher-margin products. By doing so, they can maintain a positive relationship with Phuong while also maximizing their profitability.

Phuong Is a Customer of PVL Corporation