According to Philip Kotler, "a profitable customer is a person, household or a company that overtime, yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling and servicing the customer."
However, abandoning customers is a sensitive practice, and a business should always consider the public relations consequences of such actions.
A common phrase within a company is something like: "We had a good year, and the business units delivered $400,000 in profits."
Although these can be useful metrics, they sometimes disguise an important fact that not all customers are equal and some are unprofitable.
[citation needed] At the other end of the distribution, firms sometimes find that their worst customers actually cost more to serve than the revenue they deliver.
If the firm decides not to allocate these non-customer costs to customers, then the sum of customer profit will be greater than the operating profit of the firm.