Development of a segmental customer profitability analysis system in an Australian telecommunications company: an innovation action research case study

This paper documents the successful design and implementation of a geographically segmented customer profitability analysis (CPA) system in an Australian telecommunications company. The account of the innovation action research case study is discussed in terms of the key design and implementation issues at each stage of the system development from initial site induction to the ultimate production of the CPA system. The results of the analysis in terms of the output of the segment al CPA system and potential areas of improvement are presented. The main finding of the segmental CPA was that all geographic sectors showed a positive net contribution, although customer profitability declined across the sectors with Minor Rural customers contributing the smallest profit. In addition, all low-spend customer segments were found to have a negative net contribution that increased across the geographic sectors. A number of recommendations are made to enhance the segmental CPA system for future reporting and suggestions are made for further customer accounting analyses.