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Gains
(Losses) From Retained Customers, Future Periods
Like the previous measure, this metric is valuable for demonstrating
the incremental payout of retaining customers from one period
to the next. However, this metric projects the payout into
the future.
| Measure: |
 |
|
Expected
Gains (Losses)
From Retained Customers,
Future Periods =
|
|
where:
T
= the current period
NT-i = the number of
customers acquired i periods ago
rT+k,i = the proportion
of customers acquired i periods ago that still remain
at the end of T+k (i.e., the survival rate at time T+k
for the 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 period T-1 for customers acquired i
periods ago
d = the discount rate. |
| Example: |
| |
Table
Flow-2 shows the results of this computation and
is based on t the data in Table
Balance-3 and Table
Balance-4.
Note
that during some years the change gains (losses) in
equity are zero for a particular cohort. This is because on average the behavior of the customers in this
cohort has not changed from the previous year.
Thus the margin difference is zero (See Table
Balance-3).
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