Professional Documents
Culture Documents
Shikha Sharma
Gaurav Mittal
Sahil Joon
Jagpreet Singh
Lakshay Mehra
A process where the company stops providing a product
or service to an existing customer.
Fast becoming a viable strategy for many organisations.
According to a survey in 2005-06, 38 executives form 32
companies were interviewed.
Also, included a random sample of 236 customers.
90% said they had given serious thoughts to divest
customers & 10% had already undertaken divestment.
0f the customers, 23% indicated they have been let go by
the company in the past year.
Profitabililty
Customers not providing sufficient returns on investments specially
in the Finance and insurance industries where the customer risk
factor is really high.
Companies in the retail and service sector have also divested
themselves of customers in order to stem losses.
For instance, retailers like sears and best but charged restocking
fees to discourage customers from returning products.
Some organisations are systematic about separating the profitable
customer from the unprofitable ones. They use analytical tools to
compute customer lifetime value scores and other relevant metrics.
Increase employee productivity and
morale