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A common exhortation, which we’ve heard in different forms at different times in our workshops: measure total customer cost, and from this measure how much you earn (gross margin, net profit) on each customer, and how many customers you need to break even.
Importantly, total customer cost includes the cost of acquisition and retention of each customer – effort, time, resources, marketing, sales, networking, administration, maintenance, quality, comms, and, these days, green costs and costs related to community social responsibility. New businesses tend to heavily underestimate total customer cost.
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