Qwest communications, the Denver based local telephone company, reported a profit increase despite drop in revenues. Unlike CPGs that delivered the same pattern of results through price realization, Qwest achieved profit growth by looking at the cost of serving customers and improving customer margin. Here is what Qwest CEO described the profit increase
Half of our annual decline in revenue was due to initiatives to improve profitability and reduce low-margin revenue
Clearly Qwest understands now the cost of serving different customers and focusing on the margin per customer instead of clumping together all segment numbers into one number. If it costs more to serve a customer, is it worth serving them?