The customer is not always right. Not when he or she (or it) is an unprofitable customer. Unfortunately, few companies have yet come to grips with the strategic, organizational and cultural challenges that must be addressed to take a thoroughgoing approach toward customer profitability. Such an approach would certainly raise serious questions about the vast resources now being turned over to mass advertising firms in the name of product-based, brand-building -- efforts that revolve around faceless indicators like market-share and voodoo linkages to shareholder value rather than segment- and even account-specific measures based on real customer value.

Ventana Research contends "customer profitability will be an important differentiator of performance over the next three years." The research firm is advising its clients "to address customer profitability at a corporate level instead of taking a silo approach. In our judgment, CFOs should take the lead in shaping, organizing, and coordinating these efforts to give initiatives a senior level focus and because the resources required for analysis and implementation can be found in the finance organization. Information technology will be one of several key components to the success of customer profitability initiatives, enabling corporations to gain important insights into what drives margins and allowing them to measure how well the initiatives are paying off."