0403

Problem

Evaluate this statement: Large customers tend to be either the most or least profitable in the customer base of a business-to-business firm.

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Literally, a firm composes of three categories of customers in a business-to-business firm. These three categories of customer firms leave a business firm with its 100 percent total profits. The three types of customer firms are detailed in below:

1. Most profitable customer firms:

They consist of mere 20 percent of the total customer group and provide 80 percent of the sales and involves in 150 percent to 300 percent of total profits.

2. Average profitable customer firms:

These consist of nearly 70 percentages of customers. They reach break-even profits.

3. Least profitable customer firms:

These firms compose of mere 10 percent of customers and lose from 50 to 200 percent of total profits.

Statement evaluation:

Yes, it is rightly stated that large customers tend to be either the most or least profitable in the customer base of a business-to- business firm. It is supported by various previous business records and events. Even if the large customers fail to be most profitable, they appear in providing least profits to the firm. It is very rare for large customers to involve in the middle of the profit providers card.