Identify which customers drive profit and which erode it. Master the strategies to optimize pricing, segmentation, and long-term business growth.

Are all your customers truly profitable? Many companies proclaim they are customer-focused, yet surprisingly few calculate the actual profitability of individual customers or segments. Understanding customer profitability is a critical component of driving business success. Yet, many companies focus on product or market profitability while neglecting the customers who ultimately drive revenue and costs.
This course provides a deep dive into the principles, calculations, and strategies necessary to implement Customer Profitability Analysis (CPA) effectively.
The course is divided into three sections:
Customer Profitability Basics: We begin by defining the essential terms—"customer" and "profitability"—acknowledging that different organizations may view these through the lens of individual relationships or broader market segments. You will learn why high-revenue customers are not always high-profit customers. You'll also be introduced to the "Whale Curve," which shows that a small percentage of customers often generate the majority of profits, while others may actually destroy value. The section also highlights the benefits of customer profitability analysis, such as targeted marketing, better pricing strategies, and improved product development.
Calculating Customer Profitability: The second section focuses on the technical aspects of calculating customer profitability. It covers Activity-Based Costing (ABC) as a foundational tool. Participants will learn how to calculate periodic customer profitability and Customer Lifetime Value (CLV). The section also addresses the challenges of allocating indirect costs and the importance of distinguishing between historical and marginal costs for decision-making.
Improving Customer Profitability: The final section provides actionable strategies to improve customer profitability. Participants will learn how to identify profitability killers and implement solutions to address these issues. The course also emphasizes the importance of developing a customer portfolio mindset and aligning incentive compensation programs with profitability.
By the end of this course, you will be able to:
Whether you are a finance professional, a business advisor, or a manager looking to optimize your portfolio, this course provides the insights needed to transform your approach to customer management. Learn how to turn data into a strategic asset that drives sustainable growth and maximizes company value.

Founder of CFO Perspective
Rob Stephens is the Founder of CFO Perspective, which provides continuing education courses for CPAs and financial management courses for business advisors and staff. He has been quoted in Forbes, U.S. News and World Report, Bloomberg Businessweek, and many other news sources. He is also the author of Key Performance Indicators and KPI Dashboards. Rob has a 30-year career that includes serving as a CFO, Director of Operations, and SVP of Finance. Rob is an adjunct instructor for the MBA program at Gonzaga University. Rob holds a Masters of Science in Personal Financial Planning and a Graduate Certificate in Financial Therapy from Kansas State University. He received a B.A. in Business Administration from the University of Washington.
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