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In today's competitive environment, profitability analysis is not just aboutlooking at the profit and loss statement. It is more about knowing which ofyour customers are making you money and which are losing you money. This paperconsiders how activity-based costing approach may complement a customerrelationship management effort. The model presented in this paper combines theprinciples of activity-based costing with performance measurement. Applyingthis model helps managers understand the true costs of providing products andservices, and the factors that drive these costs, while addressing otherconcerns such as customer satisfaction. This approach has the potential tointegrate all business processes around the requirements of significantprofitable customers, a fact that most of the previous researches fail toacknowledge.

Developing an Activity-Based Costing Approach to Maximize the Efficiency of Customer Relationship Management Projects