Most of these sales cannibalized existing profitable products. For these top customers, marketing should focus on retention, not cross or up selling. Some unprofitable customers could be nudged into profitability if they were offered the right products at the right prices There were, however, many customers for whom there was very little potential for profit. Faced with these sobering facts, the marketing staff decided to figure out ways to use the database that they had created to turn the situation around. It is calculated based on the current products that the customer is now using, including planned re-pricing.
Organizational profitability is computed by adding up the profits from each line of business.
Some costs, such as overhead, are not allocated to each customer, since the methods for doing this involve arbitrary decisions which may distort the real profitability of the customer to the bank. Organizationally, of course, each account is only counted once, not twice. Given these qualifications, lifetime customer profitability at Fleet is calculated for each bank customer and stored in the customer's database record each month. Customers can then be ranked and segmented. It is possible to pick out the top customers, those just below the top, the average customers and the unprofitable customers.