Improving customer profitability
Use this free Customer Development calculator to undertake ‘what-if’ scenario analysis to see how best to maximise customer value and return on marketing investment (ROI).
Follow the ‘Step’ sequence to enter your parameters. Step 1 needs you to enter information about the size of your customer base – how many customers you have in total or in a specific customer segment such as purchasers of specific products or services. Then enter the average order value, how many purchases a typical customer makes each year, the gross margin (after direct costs) and how much you spend on marketing as a percentage of sales.
For new customers, enter a percentage of first year sales attributed to the recruitment cost. Once entered, use the sliders in step 2 to set how many active and inactive customers you have. Lapsed will be calculated automatically. Then press the long button at the bottom to change parameters and see the effect on your bottom line. The button on the bottom right lets you toggle between varying the change in customer status and the % margin and marketing spend. Lastly, the button top right lets you enter costs for data and analysis work to create and maintain a single customer view to facilitate the sales and marketing effort required. For more information, click here or telephone Tech4T on 01733 890790.