How To Calculate Customer Success Margin in Dynamics365 | Arithmix

Calculating customer success margin is an important aspect of any business. It helps you to measure the profitability of your customer relationships and determine the value of your customer base. In this article, we will discuss what customer success margin is, when it is valuable to calculate it, and how to calculate it.

What Is Customer Success Margin?

Customer success margin is the difference between the revenue generated by a customer and the cost of acquiring and serving that customer. It is a metric that helps businesses to understand the profitability of their customer relationships. By calculating customer success margin, businesses can identify which customers are the most profitable and which ones are not worth the investment.

Customer success margin is calculated by subtracting the cost of acquiring and serving a customer from the revenue generated by that customer. The cost of acquiring and serving a customer includes the cost of sales and marketing, customer support, and any other expenses associated with serving that customer. The revenue generated by a customer includes all the money that the customer has spent on your products or services.

When Is It Valuable To Calculate Customer Success Margin?

Calculating customer success margin is valuable in a number of situations. It can help businesses to:

• Identify the most profitable customers
• Determine the value of their customer base
• Identify areas where they can reduce costs
• Improve customer retention

By understanding the profitability of their customer relationships, businesses can make informed decisions about how to allocate resources and improve their bottom line.

How To Calculate Customer Success Margin

To calculate customer success margin, you need to know the revenue generated by a customer and the cost of acquiring and serving that customer. Here's how to do it:

1. Calculate the revenue generated by the customer: This includes all the money that the customer has spent on your products or services.
2. Calculate the cost of acquiring and serving the customer: This includes the cost of sales and marketing, customer support, and any other expenses associated with serving that customer.
3. Subtract the cost of acquiring and serving the customer from the revenue generated by the customer: This will give you the customer success margin.

For example, if a customer has spent $1,000 on your products or services and the cost of acquiring and serving that customer was $500, the customer success margin would be $500.

Calculating customer success margin is an important metric for any business. By understanding the profitability of their customer relationships, businesses can make informed decisions about how to allocate resources and improve their bottom line.

How Do You Calculate Customer Success Margin in Dynamics365

Dynamics365 itself isn’t naturally geared towards letting you calculate complex metrics like Customer Success Margin. As an alternative, teams typically use products like Arithmix to import data from Dynamics365 and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Dynamics365, combine it with data from other systems, and create calculations like Customer Success Margin.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Customer Success Margin in Arithmix

Calculating metrics like Customer Success Margin is simple in Arithmix. Once you've created your free account, you’ll be able to import your Dynamics365 data, and use it to create natural language formulas for metrics like Customer Success Margin.

Arithmix is designed to give you the power to build any calculations you want on top of your Dynamics365 data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.