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.
Travel
Travel demand is seasonal, price-sensitive and easy to overpay for.
Market context
Market context
Travel businesses compete on price visibility, distribution and trust. Growth often depends on paid search and aggregators, while value depends on repeat travelers and ancillary revenue.
Commercial pressures
- 01Paid search and metasearch costs rising in peak seasons.
- 02Price comparison compressing margin.
- 03Customer loyalty weakened by aggregator relationships.
Customer economics questions
The questions leadership should be able to answer.
Q1
What is the true cost of acquiring a booking, by channel and season?
Q2
Which travelers return, and through which channel?
Q3
Where do ancillaries change the economics of a booking?
Relevant capabilities
Where the work usually starts.
- 04Marketing & SalesConnect acquisition and selling activity to actual customer economics.Explore capability
Demand · Customer · Transaction
- 01Customer EconomicsUnderstand the quality and economics of the customers generating growth.Explore capability
Customer · Contribution · Repeat
- 03Revenue & PricingImprove revenue quality and capture more of the value being created.Explore capability
Transaction · Contribution
Illustrative commercial problem
Illustrative · Not a client example
Paying peak prices for demand that was coming anyway
Illustrative pattern. A travel brand raises paid search spend for peak season. Bookings rise, but most came from returning customers searching for the brand by name.
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