marketing is one of the least understood, least measurable functions at many companies.

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science.”—Wil

A sales goal based on prior-year sales and the sales potential of a territory can be calculated as follows: Sales Goal ($) = Salesperson’s Prior-Year Sales ($) + [Forecasted Sales Increase for District($) * Territory’s Share of Sales Potential in District (%)]

Timing is an important issue in incentive plans. A firm must collect data in a timely fashion so that both managers and salespeople know where they stand in relation to established goals.

Find out the cost to serve each customer and the revenues associated with each customer for a given period. Do the subtraction to get profit for the customer and sort the customers based on profit.

view market dynamics from various perspectives and arrive at “triangulated” strategies and solutions.

Gupta, S., and Donald R. Lehmann. (2003). “Customers As Assets,” Journal of Interactive Marketing, 17(1).

For managers, the question is “Does it make a difference whether I use the infinite time horizon or (for example) the five-year customer value?” The answer to this question is yes, sometimes, it can make a difference because the value over five years can be less than 70% of the value over an infinite horizon (see Table 5.3

number retained refers only to those retained from the pool of customers in existence at the start of the period.