Qwest Focuses on Customer Margin

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?