Agenda

Determining the Annual Profitability of a Customer

• Use Activity-Based Costing to Assign Costs to Customers
• Subtract Costs From Revenues
• Compare Revenues and Profits
• The Best Customers in Terms of Sales Revenue Might Not Be Profitable

Increasing the Annual Profitability of a Customer

• Increase the Frequency of Purchases
• Increase the Average Purchase Amount
• Decrease the Non-Value-Added Costs of Serving a Customer

Calculate the Lifetime Value of a Customer

• Present Value of All Future Cash Flows Multiplied by the Retention Rate
• Include Cash Flows From Referrals
• Subtract Acquisition Cost and Retention Cost

Strategies for Increasing the Lifetime Value of a Customer

• Increase the Retention Rate
• Implement an Active Referral and Leads Program
• Add More Products (Or Services) to Sell to Customers

Increase Shareholder Value

• Customers Are Assets
• Increasing the Lifetime Value of Customers Increases the Value of a Company's Assets
• If Liabilities Remain Constant, Shareholder Value Increases

Credits

Faculty

Alan D. Campbell

• Has served on the faculties of several universities and as a self-employed consultant
• Practice emphasizes all aspects of tax research and tax planning for tax professionals and businesses
• Conducts regular seminars and workshops on tax topics for individuals and businesses
• Author of several publications related to the areas of tax planning in numerous journals, including The Tax Adviser, Practical Tax Strategies, and the Journal of Accountancy; Four of his articles relate directly to the self-employment tax
• Co-author of the book Tax Strategies for the Self-Employed published by CCH Incorporated
• American Institute of Certified Public Accountants and Institute of Management Accountants
• B.S. degree in accounting, Arkansas State University; M.B.A. degree in business administration, Arkansas State University; Ph.D. degree in accounting, University of North Texas
• Can be contacted at 936-553-4364 or [email protected]