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.
Hospitality
Occupancy is a measure of volume. Rate and repeat are measures of value.
Market context
Market context
Hotels, restaurants and venues sell perishable capacity. Economics depend on rate integrity, channel mix, ancillary spend and the guests who return directly.
Commercial pressures
- 01Online travel agency commissions on a growing share of bookings.
- 02Discounting to fill capacity in soft periods.
- 03Loyalty and direct-booking programs with unclear returns.
Customer economics questions
The questions leadership should be able to answer.
Q1
What is net rate after distribution cost, by channel?
Q2
Which guest segments return directly?
Q3
Where does discounting fill rooms that would have sold anyway?
Relevant capabilities
Where the work usually starts.
- 03Revenue & PricingImprove revenue quality and capture more of the value being created.Explore capability
Transaction · Contribution
- 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
Illustrative commercial problem
Illustrative · Not a client example
Full rooms, thinner margins
Illustrative pattern. Occupancy reaches a record while average net rate after commission falls, and the share of guests booking direct declines.
Also in Consumer Services
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