Calculating Customer Profitability
Stop Guessing and Start Measuring the Profit from Your Customers
Watch this guide to understand and measure the financial contribution of customers to your business. We’ll explore profitability both for a period of time and for the lifetime of a customer. You’ll learn:
- How to calculate periodic customer profitability using income statement-style analysis.
- The difference between periodic customer profitability and customer lifetime value (CLV).
- The role of direct, indirect, and marginal costs in customer profitability analysis.
- How to calculate customer lifetime value (CLV) to assess long-term customer contributions.
- When a customer is considered unprofitable (the answer may surprise you).