Customer Metrics

Customer Equity
● Value Indicator
● Brand Prowess
● Financial upshot

The connection with customer equity

•Better brand equity < customer equity

•Better value equity < customer equity
•Better retention equity < customer equity

https://www.qualtrics.com/au/experience-management/customer/customer-
equity/#:~:text=Customer%20equity%20is%20the%20sum,their%20relationship%20with%20your%20brand.
Value co-creation
Basic Requirement
Specific Requirement
Demand
- wants + desire + willingness to buy

Value = B:C
Customer-Product Profitability Analysis

Copyright © 2012
Pearson
Education
Customer Profitability: Key analysis

The difference between the revenues earned and the costs associated with the
customer relationship during a specified period.

The company’s overall profitability can be improved by treating dissimilar

customers differently.

In essence, think of three different tiers of customers:

1. Top Tier customers—REWARD
2. Second Tier customers—GROW
3. Third Tier customers—FIRE
KPI & Consumer Metrics
Define the Time Frame – Gather Data - Analyze

Calculate Average Purchase Value:

Average Purchase Value = Total Revenue / Number of Transactions

Calculate Average Purchase Frequency:

Average Purchase Frequency = Number of Transactions / Number of Customers

Estimate Average Customer Lifespan & Calculate Customer Value

Customer Value = Average Purchase Value × Average Purchase Frequency ×
Average Customer Lifespan

Determine Profit Margin:

Calculate your profit margin as a decimal (e.g., 20% becomes 0.2).

Calculate Customer Lifetime Value (CLV):

CLV= Customer Value × Profit Margin
Marketing Funnel