Consumers Profitability Model Customer Value Measurement

Consumers profitability is some thing that keeps bothering brands. Companies try to acquire the most profitable customer so that hey have better profits. after all profit is what they want. Acquiring a customer has always been expensive for many brands. As these brands , start to quantify value of the customer they acquire its important to understand a concept called – Customer Value Measurement.

Please don’t expect customers to be your “Mint factory” they tend to evaluate brands and try to map their perception with brands before they feel the brands is for ” ME”. So it is going to happen that you feel the customer is not profitable in the beginning but its value tends to increase and so does your ROI. After all you have invested your money, efforts in carrying out activities that in turn helped you acquire customers.

Please understand Customers tent to be more profitable over a period of time. so during the first year your Acquisition cost will be more than the the revenue generated. This is natural as customer tends to be cautious while using and trying out your brand and compare it with others that it might be using now or might be willing to use soon.  As you tend to get a bit of inclination from customers towards your brand they tend to add value to the revenue. As the time moves (would say customers life time ) customer gets more familiar to your brands and starts loving it. This is when your year on year revenue starts increasing.

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