Profitability as a method to classify customers
Protect Zone
Customers in the “Protect Zone” are the most profitable.
Danger Zone
Customers in the “Danger Zone” are the least profitable and might generate loss.
The firm’s options for “Danger Zone” customers:
change customer interaction with firm so they can move up to an acceptable zone
charge the customer the actual cost of doing business
Build Zone
These customers have a low cost to serve and a low net sales value, so the firm should maintain the cost to serve and build net sales value to help drive the customer into the “Protect” segment.