Key Marketing Metrics, 3rd Edition

5

Customer profitability

Key concepts covered in this chapter:

• Customers, recency, and retention
• Customer profit
• Customer lifetime value
• Acquisition versus retention spending
• Prospect value versus customer value

Introduction

Chapter 2, “Share of hearts, minds, and markets,” presents metrics designed to measure how well a firm is doing with its customers on the whole. To this point in the book, we have discussed metrics that provide summaries of firm performance with respect to customers for entire markets or market segments. In this chapter, we cover metrics that measure the performance of individual customer relationships. We start with metrics designed to simply count how many customers the firm serves. As this chapter illustrates, it ...