Expected Lost Profit from Defecting Customers, Current Period

This computation is similar to the ones just computed, except that it determines the number of lost customers rather than retained customers. With this number, firms can compute the amount of lost customer value.

Computation:
	Multiply the number of defected customers by the difference between the current period margin that would have been gained and the marketing costs associated with those customers; then add this figure across all customer cohorts. Note that most of the lost Customer Equity™ occurs during the first several periods in the customer-firm relationship, since this is when attrition tends to be the highest.
Measure:
	Expected Lost Profit from Attriting Customers, Current Period = where: T = the current period NT-i = the number of customers acquired i periods ago rT-1-i,i = the proportion of customers acquired i periods ago that still remain at the end of T-1 1-rT,i = the attrition rate for the current period for customers acquired i periods ago mT,i = the margin in the current period for customers acquired i periods ago cT,i = the marketing cost in period T for customers acquired i periods ago d = the discount rate.
Example:
	Table Flow-3 shows the results of this computation and is based on projections about the customer survival rate reported in Table Balance-3 and the resulting number of active customers which is reported in Table Balance-4.