Customer profitability and cost to serve
Gross margin stops at the product. Covirage joins your ledger to your delivery, order and activity files and takes off what each customer's own behavior costs: drops, keyed order lines, visits, returns and late payment. The ranking of customers usually changes, and the table shows which behavior to change for each account that loses money.
Gross margin percent is highest on small accounts that buy at list. They also take small, frequent deliveries and key their orders by phone. Allocating cost by revenue gives every customer the same percentage and shows nothing, so each cost is allocated by the activity that causes it.
Driver counts from your own files, multiplied by a rate that is each cost pool divided by its total driver count.
Gross margin less rebates and cost to serve, with the ratio of cost to serve to margin beside it. Above 100 percent the account loses money as served.
For each loss-making account, the largest driver: drop size, order channel, delivery days or payment terms.
Three steps, in this order.
The ledger with margin, plus delivery, order and visit files, and the cost pools from finance. Client IDs only.
Which cost is allocated by which activity. Fixed overhead is left out, because no customer's behavior changes it.
Customers ranked by contribution, with the identity that allocated cost equals the pools checked before anything is shown.
Short answers. The Help center has the long ones.
Rarely. The table shows how they are served, which can usually be changed: a minimum order value, fewer delivery days, moving orders to a portal.
Because overhead spread by revenue is the same percentage for every customer and cannot change a ranking. It only makes customers look unprofitable who are paying toward costs that would remain.
Less than you would think. Whether a drop costs 35 or 42, the account taking 250 small drops is in the same place on the list.
Written for this job: the measures, the data you already hold, and the arithmetic.
Amazon marketing analytics compares advertising spend with sales, refunds, seller fees and product costs. Follow a seller-export reconciliation that separates attributed revenue from the contribution remaining on matched sales.
Oct 25, 20266 min readCompare channel spending with consistently defined leads, qualified leads, and won customers. This guide gives the export layout, spreadsheet formulas, worked channel table, and reconciliation checks.
Oct 25, 20266 min readCustomer lifetime value estimates the future contribution of one customer. Customer equity adds those estimates across a defined customer base, so portfolio size and customer mix matter alongside individual value.
Oct 25, 20265 min readCompare late deliveries, returns, repeat contacts, and subsequent purchases from order exports. Build matched order cohorts, calculate contribution, and check the totals before choosing an improvement.
Oct 25, 20265 min readCompare collected fees with attributable labor and matter costs from practice-management exports. This guide calculates fee realization, matter contribution and practice totals while keeping shared overhead allocations visible.
Oct 25, 20266 min readBuild a SKU contribution table by joining sales to approved product costs and allocating a defined support pool. Work the Excel formulas and reconcile revenue, cost and allocated support to their source files.
Oct 25, 20264 min read