AT&T
Today AT&T faces a serious dilemma in whether or not to continue a relationship with their least profitable customers. AT&T's customer base today perfectly fits the 80/20 rule first devised by Italian economist Vilfredo Paereto in the 19th century (Krotz). Currently, over 80% of AT&T's revenue is generated by the top 20% of customers. By eliminating the least profitable 80% of customers, the company would make a profit similar to what is currently being seen. This raises the serious question of whether AT&T should consider eliminating these customers from their customer base. In the solution proposed today, this lower 80% of customers would be "sold" or outsourced to other firms that offer higher rates than AT&T.
Advantages
The most obvious advantage of getting rid of these least-profitable customers would be financial. Eliminating these customers would free the company from spending money on maintaining a customer relationship that is not profitable. Company resources could be focused more closely on increasing profit, rather then gaining revenue...
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