Customer economics and cash

Work out how much gross profit one customer brings over their whole time buying, divide by what they cost, and read the ratio.

Put one number on what it costs to win a new customer: which costs go in, how to divide them, and which levers move it.

Work out how long a new customer leaves you out of pocket, compute it on margin, and bring the break-even date forward.

Grade your advertising against three tests of lifetime and first-thirty-day gross profit versus acquisition cost, and see what each level unlocks.

When you want more gross profit per sale while leaving the price alone: choose from nine levers that cut delivery cost.

Use when money is why you can't do more, to tell whether leads, sales, profit per customer or cash flow is the problem.

Use once you know the money problem is leads, sales or profit per customer, to pick the fix and the page that holds it.

Use when leads, sales and profit are fine but cash arrives too slowly, to bring money in sooner through terms, prepayment, fees and financing.

Use to size the most a business can reach as it runs now, and whether it is heading up or down toward that ceiling.

Use before trying to make each customer worth more, to confirm that value per customer is truly the constraint and choose your war.

Use when you sell a knowledge-based service, to measure your gross margin against an 80 percent rule of thumb and close the gap by price, capacity or a better tier.

Set a margin target for each revenue line and hold leaders to it, instead of judging yourself by your trade's normal figures.

Make each customer cheaper to serve: survey which parts of delivery each kind of customer values, then cut the rest.