If CRM refers to the firm’s ability to internalize the benefits of a customer-orientation, then Customer Profitability Analysis (CPA) provides an insight into the activities that generate cost for a broad range of customers. At the forefront of Apple’s innovative technology and design portfolio lies the customer base, though we must learn to recognise not all customers are the same. In fact, “individual customer satisfaction does not necessarily lead to customer profitability”, which requires further understanding into the range of customers (individual, segments), identifying their contribution value, and determining the level of resource consumption in time and cost (ICAEW 2002 p. 8). It is in the preliminary findings where managers will
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Indubitably, Dalci, Tanis & Kosan (2010) found Activity Based Costing (ABC) works to measure the driver of cost and the associated object of this cost (products, customers). The ABC method demonstrates a cause-and-effect relationship where the product, service or customer generates the assumed cost of the activities and vice-versa (Dalci, Tanis & Kosan 2010). Traditional ABC methods are limited by inadequate estimates of resource consumption, namely time, associated with the cost of activities performed in service (Dalci, Tanis & Kosan 2010). Advocates for Time-Driven Activity Based Costing (TDABC) argue that visibility denotes both the transparency of unused resources (or capacity) and the firm’s ability to gain knowledge from the most time and resource driven customers (Dalci, Tanis & Kosan 2010). Apple will find merit in using this pragmatic approach to its retail division and use this metric system to yield the value of “cost per time unit” (Dalci, Tanis & Kosan 2010 p. …show more content…
This example of maintained profitability is evident in Apple’s firm grasp of the mobile device market from customers that contributed two-thirds of Apple 's revenue (iPhone, iPad) and generated 92.2% of the total sales volume (Apple Q3 2016). Reinartz & Kumar (2003) commend the benefits of managing customer satisfaction, and long-term value of customers who become more acclimated to the product range, quality, and interaction processes that are standard across Apple’s brand. Moreover, the lifelong customer is able to sustain profitability, characterized by a greater scope of the customer relationship and management (Reinartz and Kumar
Indubitably, Dalci, Tanis & Kosan (2010) found Activity Based Costing (ABC) works to measure the driver of cost and the associated object of this cost (products, customers). The ABC method demonstrates a cause-and-effect relationship where the product, service or customer generates the assumed cost of the activities and vice-versa (Dalci, Tanis & Kosan 2010). Traditional ABC methods are limited by inadequate estimates of resource consumption, namely time, associated with the cost of activities performed in service (Dalci, Tanis & Kosan 2010). Advocates for Time-Driven Activity Based Costing (TDABC) argue that visibility denotes both the transparency of unused resources (or capacity) and the firm’s ability to gain knowledge from the most time and resource driven customers (Dalci, Tanis & Kosan 2010). Apple will find merit in using this pragmatic approach to its retail division and use this metric system to yield the value of “cost per time unit” (Dalci, Tanis & Kosan 2010 p. …show more content…
This example of maintained profitability is evident in Apple’s firm grasp of the mobile device market from customers that contributed two-thirds of Apple 's revenue (iPhone, iPad) and generated 92.2% of the total sales volume (Apple Q3 2016). Reinartz & Kumar (2003) commend the benefits of managing customer satisfaction, and long-term value of customers who become more acclimated to the product range, quality, and interaction processes that are standard across Apple’s brand. Moreover, the lifelong customer is able to sustain profitability, characterized by a greater scope of the customer relationship and management (Reinartz and Kumar