Thesis work paper Removing Unprofitable Customers.

As Sutton (Sutton, 2002) indicates, inadequate cost cutting normally occurs because customers have not been ranked or sorted according to their profitability. Davidson (Davidson, 2001) likewise states that many software companies lack clear marketing plans (especially in their early years) and commonly this is found among smaller firms. Intrinsically then, the firms underlying profitability is affected because of the lack of focus on the correct target market. This manifests itself in incorrect pricing structures.