Gains (Losses) From Retained Customers, Current Period

This metric shows the incremental profits (or losses) in the current period that the firm gained by keeping a portion of the prior periods' customers in the current period. If the customer margin decreases compared to the prior period, then losses occur. The reverse is true if margins increase. Retention rates and margins are the two most important variables affecting gains (or losses) from retained customers in the current period.

Computation:
	For each customer cohort, compute the difference between the current period's margin and the prior period's margin, and multiply by the number of customers for the period. Then sum across cohorts.
Measure:
	Gains (Losses) from Retained Customers, Current Period = where: T = the current period NT-i = the number of customers who were acquired i periods ago rT-i = the proportion of customers who were acquired i periods ago that still remain at the end of time T (i.e., the current survival rate for cohort of customers acquired i periods ago) mT,i = the margin after marketing costs in the current period for customers acquired i periods ago MT-1,i = the margin after marketing costs in the prior period for customers acquired i periods ago
Example:
	Table Flow-1 shows the results of this computation for the cohorts of customers acquired between 1993 and 1999.  The number of active customers is based on the numbers in Table Balance-4 and the change in margin is based on the data in Table Balance-3.