Seen from this perspective, customer profitability is emerging as an important dimension in which each (unique) customer can be described. A focus on customer-level profitability can also be conceived of as a reflection of marketing's changing role within the firm .An important aspect of the new role is that marketing is too important to be left to the marketing department. Consequently, at least in marketing literature, other departments are encouraged to deal with marketing issues. This can be seen particularly in terms of cost control, in the sense that marketing performance measures are being introduced in cost accounting literature and practice. For example, activity-based costing and balanced scorecard techniques often include dimensions which are highly relevant to marketing. In this context, it is worth noting that marketing has traditionally lagged behind other functional areas of business with respect to the implementation of cost control systems. Another factor behind the interest in customer profitability (and its links to behaviour and attitudes) is the development of information technology, e.g. in terms of data warehouses, which allows for a detailed analysis of each customer.
Despite the growing interest in customer profitability, identifying profitable.
customers is likely to be easier said than done for most firms. The main reason is that few firms have an internal accounting system which allows for an analysis of profitability at the individual customer level. At least this is what many academicians claim (Howell & Soucy 1990, Myer 1989, Reichheld 1996, Slywotzky & Shapiro 1993). However, given that several computerized systems which facilitate an analysis of customer profitability are commercially availiable on the market, there are reasons to belive that practitioners are experimenting with such data to an extent that is not yet reported in academic journals. In any case, profitability data on the customer level are generally not collected in empirical studies carried out by marketing scholars.
