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Customer Profitability Analysis

The document analyzes customer profitability across 3 segments for a company. Segment 3 had the largest revenue, gross margin, and customer profit, but also the highest acquisition and termination costs per customer. Overall, the company had 26 active customers at the start of the period, gained 10 and lost 5, for a total of 26. Total revenue was $5.8 million with Segment 3 contributing 43% of revenue and 86% of total customer profit.

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183 views1 page

Customer Profitability Analysis

The document analyzes customer profitability across 3 segments for a company. Segment 3 had the largest revenue, gross margin, and customer profit, but also the highest acquisition and termination costs per customer. Overall, the company had 26 active customers at the start of the period, gained 10 and lost 5, for a total of 26. Total revenue was $5.8 million with Segment 3 contributing 43% of revenue and 86% of total customer profit.

Uploaded by

Adriana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Company Name

Customer Profitability Analysis


Date Prepared: [Enter Date]

Segment Name 1 Segment Name 2 Segment Name 3 Overall

Customer Activity
umber of active customers - beginning of period 5 8 8 21
Number of customers added 2 4 4 10
Number of customers lost/terminated 1 2 2 5
Number of active customers - end of period 6 10 10 26

Profitability Analysis
Revenue per segment $ 1,500,000.00 $ 1,800,000.00 $ 2,500,000.00 $ 5,800,000.00
Weighting 26% 31% 43%

Cost of Sales
Ongoing service and support costs $ 1,000,000.00 $ 1,400,000.00 $ 1,400,000.00 $ 3,800,000.00
Other direct customer costs $ 200,000.00 $ 100,000.00 $ 100,000.00 $ 400,000.00
Total cost of sales $ 1,200,000.00 $ 1,500,000.00 $ 1,500,000.00 $ 4,200,000.00
Gross margin $ 300,000.00 $ 300,000.00 $ 1,000,000.00 $ 1,600,000.00
Weighting 19% 19% 63%

Acquisition Costs
Direct customer acquisition $ 105,000.00 $ 120,000.00 $ 235,000.00 $ 460,000.00
Customer marketing $ 150,000.00 $ 125,000.00 $ 275,000.00 $ 550,000.00
Customer termination $ 35,000.00 $ 10,000.00 $ 140,000.00 $ 185,000.00
Total acquisition costs $ 290,000.00 $ 255,000.00 $ 650,000.00 $ 1,195,000.00
Customer profit by segment $ 10,000.00 $ 45,000.00 $ 350,000.00 $ 405,000.00
Weighting 2% 11% 86%

Summary Metrics per Segment


Segment Name 1 Segment Name 2 Segment Name 3
Average cost per acquired customer $ 52,500.00 $ 30,000.00 $ 58,750.00 $ 46,000.00
Average marketing cost per active customer $ 25,000.00 $ 12,500.00 $ 27,500.00 $ 21,153.85
Average cost per terminated customer $ 35,000.00 $ 5,000.00 $ 70,000.00 $ 37,000.00
Average profit (loss) per customer $ 1,666.67 $ 4,500.00 $ 35,000.00 $ 15,576.92

Segment Name 3 Segment Name 2 Segment Name 1

Average cost
per acqu...

Average marketing cost


per a...

Average cost
per termin...

Average profit (loss) ...

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