Dig Below the Customer-Cost Averages: CFO Journal - Wall Street Journal

A recent post on the CFO Journal blog by the Wall Street Journal by the CFO (Sam Funk) of Clearlink (an online customer-headhunter for the telecommunications, insurance and other industries) illustrates the dangers of relying on averages and totals to grow a small business more effectively.

Here are some insightful excerpts from the post:

  • “Getting customers is the goal, but knowing how much they cost to acquire is the key.”

  • “’I spend most of my time from a CFO perspective knowing how much those customers cost,’ [Funk] told CFO Journal.”

  • “Some customers are more valuable than others, and CFOs need to know which are the most profitable to target.”

  • “Depending on the service, and geographic or income demographics, some customers will be more profitable than others…. It is a mistake to blend those numbers. The difference… is in the profit margin, as some customers are more valuable….”

  • “Averages are meaningless,” he says. Rather, he asks if CFOs know “the cost of a customer group.”

Read the full post

#costs #customeranalysis #revenues

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