5.5 Customer Relationship Management

Analysis Scale
Annual Customer
Performance		 Segment Average Mass Personalization Mass Customization Customer
Relationship Mgmt
Revenue per Customer
$1000
$
$1000
$
$1200
$
$1500
$
Percent Margin
40
%
40
%
50
%
60
%
Gross Profit per Customer
400
400
600
900
Aquisition Cost
$500
$
$500
$
$500
$
$500
$
Retention Cost
$100
$
$150
$
$200
$
$250
$
Customer Profits
300
250
400
650
Customer Retention
60
%
67
%
75
%
80
%
Customer Life (years)
2.5
3.0
4.0
5.0
Discount Rate
20
20
20
20
Customer Cash Flow
Year Cash Flow Cash Flow Cash Flow Cash Flow
0
-$500
$
-$500
$
-$500
$
-$500
$
1
$300
$
$250
$
$400
$
$650
$
2
$300
$
$250
$
$400
$
$650
$
3
$150
$
$250
$
$400
$
$650
$
4
-$0
$
-$0
$
$400
$
$650
$
5
-$0
$
-$0
$
-$0
$
$650
$
6
-$0
$
-$0
$
-$0
$
-$0
$
7
-$0
$
-$0
$
-$0
$
-$0
$
8
-$0
$
-$0
$
-$0
$
-$0
$
9
-$0
$
-$0
$
-$0
$
-$0
$
10
-$0
$
-$0
$
-$0
$
-$0
$
Lifetime Value
45.14
26.62
535.49
1443.90
Starting Data Scale
Annual Customer
Performance		 Segment Average Mass Personalization Mass Customization Customer
Relationship Mgmt
Revenue per Customer
$1000
$
$1000
$
$1200
$
$1500
$
Percent Margin
40
%
40
%
50
%
60
%
Gross Profit per Customer
400
400
600
900
Aquisition Cost
$500
$
$500
$
$500
$
$500
$
Retention Cost
$100
$
$150
$
$200
$
$250
$
Customer Profits
300
250
400
650
Customer Retention
60
%
67
%
75
%
80
%
Customer Life (years)
2.5
3.0
4.0
5.0
Discount Rate
20
20
20
20
Customer Cash Flow
Year Cash Flow Cash Flow Cash Flow Cash Flow
0
-$500
$
-$500
$
-$500
$
-$500
$
1
$300
$
$250
$
$400
$
$650
$
2
$300
$
$250
$
$400
$
$650
$
3
$150
$
$250
$
$400
$
$650
$
4
-$0
$
-$0
$
$400
$
$650
$
5
-$0
$
-$0
$
-$0
$
$650
$
6
-$0
$
-$0
$
-$0
$
-$0
$
7
-$0
$
-$0
$
-$0
$
-$0
$
8
-$0
$
-$0
$
-$0
$
-$0
$
9
-$0
$
-$0
$
-$0
$
-$0
$
10
-$0
$
-$0
$
-$0
$
-$0
$
Lifetime Value
45.14
26.62
535.49
1443.90
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