Customer EconomicsObservation 0022 min read
−14.6%
Growth is not the same thing as value.
A business can get bigger and weaker at the same time. The gap shows up first in the customers, not in the P&L.
E-commerce
E-commerce shows every click and hides the economics of the order.
Market context
Market context
E-commerce businesses measure every step of the funnel and often lose sight of the order after it is placed. Shipping, returns, payment fees and discounts decide whether each order creates value.
Commercial pressures
- 01Return rates that rise with new customer cohorts.
- 02Free-shipping thresholds that shape basket size and margin.
- 03Paid acquisition costs rising faster than order value.
Customer economics questions
The questions leadership should be able to answer.
Q1
What is contribution per order after shipping, returns and fees?
Q2
Which acquisition sources bring customers who return less and repeat more?
Q3
Where do shipping and discount thresholds change basket economics?
Relevant capabilities
Where the work usually starts.
- 01Customer EconomicsUnderstand the quality and economics of the customers generating growth.Explore capability
Customer · Contribution · Repeat
- 04Marketing & SalesConnect acquisition and selling activity to actual customer economics.Explore capability
Demand · Customer · Transaction
- 03Revenue & PricingImprove revenue quality and capture more of the value being created.Explore capability
Transaction · Contribution
Illustrative commercial problem
Illustrative · Not a client example
The order that lost money after it shipped
Illustrative pattern. Conversion rate improves after a free-returns campaign. Return rates climb faster, and contribution per order falls even as revenue and orders rise.
Also in Consumer & Retail
Intelligence
Related thinking.
Marketing & SalesObservation 0032 min read
−8.2%
The cheapest acquisition is not automatically the best acquisition.
Optimizing for cost per acquisition finds the customers who are cheapest to reach, not the ones worth reaching.
Customer EconomicsObservation 0042 min read
1.2 : 1
The ratio that reads 3 to 1, and isn't.
An LTV:CAC ratio is only as good as the churn behind it. Replace assumed churn with observed churn and the green light can turn red.
A TCB engagement
10–15
Business days
Customer Economics Sprint
One commercial diagnosis and a clear 90-day path forward: the constraint identified, the economics diagnosed, the opportunity benchmarked and the intervention prioritized.
Bring the constraint.We'll give it direction.
Start with the commercial problem you're trying to solve. We'll identify the constraint, diagnose the economics, and determine whether there is a useful next step.
- 01Identify the constraint
- 02Diagnose the economics
- 03Recommend the right intervention
- 04Define the next move