This technical note introduces significant metrics businesses use to track customer relationships. The note starts by discussing the best way to count the companies' customers and keep track of their task utilizing the concepts of retention and recency. An important outline of consumer activity is the gain the firm receives from each customer. Just as some brands are more lucrative than others, so also are some customer relationships more profitable than many others.
Customer profit is the metric that summarizes the past fiscal performance of a customer relationship. A companion note, "Customer Lifetime Value" (UVA-M-0800), addresses the forward looking metric that attempts to put a dollar value on a customer relationship. This technical note is an excerpt of the more comprehensive treatment of customer metrics found in "Customer Profitability" (UVA-M-0718).
PUBLICATION DATE: April 20, 2011 PRODUCT #: UV5760-HCB-ENG
This is just an excerpt. This case is about SALES & MARKETING
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