  In today's competitive environment, profitability analysis is not just about
looking at the profit and loss statement. It is more about knowing which of
your customers are making you money and which are losing you money. This paper
considers how activity-based costing approach may complement a customer
relationship management effort. The model presented in this paper combines the
principles of activity-based costing with performance measurement. Applying
this model helps managers understand the true costs of providing products and
services, and the factors that drive these costs, while addressing other
concerns such as customer satisfaction. This approach has the potential to
integrate all business processes around the requirements of significant
profitable customers, a fact that most of the previous researches fail to
acknowledge.
