Customer Segmentation and Profitability Analysis

Objective: The objective of this study is to analyze the customer segment and profitability analysis of Nepal Electricity Authority (NEA). Research Design: The descriptive and an analytical research design are used. Nature and types of data: Quantitative and secondary data relating to customer segment, customer profit and customer cost are used. Tools for analysis: Correlation and regression analysis are used to analyze correlation between different variables and their impact on segment wise customer profitability. Findings: Among the eleven groups of customer namely Domestic, Non-Commercial, Commercial, Industrial, Water Supply & Irrigation, Street Light, Temporary Supply, Transport, Temple, Community Sales, Bulk Supply (India), the domestic customer group is most profitable and community sales customer group is least profitable group. There is high correlation between customer revenue, customer cost and customer profit. There is a significant impact of customer revenue and cost on customer account profitability. This study would be helpful to the concerned authority for formulation and implementation of strategies regarding to different customer segment.