CUSTOMER PROFITABILITY ANALYSIS USING ACTIVITY-BASED COSTING APPROACH TO IMPROVE THE COMPANY’S COMPETITIVENESS (A Case Studyof Pangeran Beach Hotel)

Profitability analysis is a tool which enables the users to evaluate company’s performance. Customer profitability analysis idea is to figure out the customer service activities and cost drivers to determine the profitability of each customer or group of customers. The use of customer profitability analysis appears as a powerful tool to allow management to consider the cost and profit from a customer perspective. The information is applicable in decision-making process to support long and short-term customer related decision. The research is accomplished by using a case study over the data of 2009. Under activity based costing approach, the cost-to-serve for each customer segment has already identified. Based on its revenue and cost level some customer types are found; individual segment and group segment as an opportunistic customer who needs a low cost-to-serve and company segment classified as achiever customer who has the highest income but also requires the highest cost-to-serve. The result allows the hotel management to identify the non-value added activity and which customer segment requires the high customer cost-to-serve, so that the management can set the strategy to manage the cost and improve its competitive advantage. Keywords: customer profitability analysis, activity-based costing, value added, non-value added, competitive advantag