Net margin per customer (after cost to serve)
Quick answer
Gross margin minus the real cost of serving that customer: deliveries, returns, selling time, receivable financing.
Key takeaways
- Logistics cost per delivery × number of deliveries
- Returns and reprocessing
- Commercial time: visits, re-quotes, complaints
- Cost of financing the receivable
Two customers with the same revenue can have opposite profitability. Small frequent drops, returns, payment terms and team time make the difference.
What goes in
- Logistics cost per delivery × number of deliveries
- Returns and reprocessing
- Commercial time: visits, re-quotes, complaints
- Cost of financing the receivable
What to do with it
- Minimum order thresholds or a below-threshold delivery fee
- Renegotiate terms where net margin is negative
- Change visit frequency where it is not justified
Real-world example
18% gross margin with four small weekly drops and 90-day terms lands at 3% net; 14% gross with one monthly delivery and 30-day terms stays at 11%.
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Frequently asked
Where does the data come from?+
CRM activity combined with ERP delivery, return and collection data.
What about unprofitable customers?+
You rarely drop them - you change the rules: order thresholds, delivery frequency, terms or price list.
Where CRMconnect fits
Related terms
Cost-to-serve
The true total cost of fulfilling an order or serving a customer: processing, picking, transport, returns and support.
SalesCLV (customer lifetime value)
Total margin a customer generates across the whole relationship, not just the first order.
FinanceGross Margin
The difference between revenue and cost of goods sold, usually expressed as a percentage of revenue.