How to calculate customer value -- and why you need to

12/27/2011 | Inc. online (free registration)

Figuring out the value of your customers is beneficial in a number of ways -- for example, it can help you to properly set your prices, Karl Stark and Bill Stewart write. When determining customer value, factor in the revenue generated by your customers as well as how long you will likely be able to retain them and how much it will cost to do so. "Most businesses are surprised by how many customers are unprofitable when they create a 'fully loaded' estimate of customer profitability," they write.

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