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Glossary
Glossary

Customer Value

Customer value estimates the expected economic contribution of a relationship over time. Depending on the model, it incorporates revenue, margin, costs, and probability of continuity. It is based on assumptions that must be documented. It helps to prioritize investments, without constituting an individual certainty about the future.

Coup de Poing editorial team2 min
Measure performance

A concrete example

A customer value estimate adds the expected contributing margins over the duration of the relationship and then subtracts the costs specific to that relationship.

A point to consider

Cumulative revenue is not net economic value. The assumptions regarding duration, margin, and cost must remain visible.

Make the economic assumption debatable

Present a duration, a contribution margin, and the service costs assumed for each segment. Distinguish between acquisition costs and future costs to avoid double deductions. Test a shorter relationship duration and an increase in the cost of benefits. When flows extend over several years, also document the treatment of their value over time with the finance team.

Questions to ask your team

  • What change in assumption would affect your acquisition budget?
  • Does the model take into account the costs specific to the segment being studied?

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Glossary 2 min

Acquisition Cost

Acquisition cost relates the expenses incurred to the number of new customers acquired within a defined scope. In referral programmes, it includes rewards as well as attributable operating costs. Validation, cancellations, and the quality of acquired customers influence the interpretation of the result.

Understand and apply
Glossary 2 min

Segmentation

Segmentation organizes a population into groups useful for a decision or action. It can be based on usage, potential, needs, or history. A segment must lead to a justifiable and understandable action. Multiplying groups without associated actions complicates management without any clear benefit.

Understand and apply
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