MKT.10:4.5 - Compare the whole contribution with its burden

Use MA.8, Account for Customer and Product Economics Over Time when the decision depends on economic consequences. Preserve the target unit and horizon, distinguish historical costs from costs changed by the future alternative, and place receipts and payments at their relevant dates. Count acquisition, preparation, adaptation, delivery, support, recovery and remaining obligations where they change the comparison.

A customer’s purchase value is not automatically incremental profit. Ask what revenue and expense would differ under the alternatives, which contributions would have happened anyway, and whether later work has been included. Avoid counting the same additional outcome under several channels or counting both its estimated monetary benefit and the same benefit inside a customer-value total.

Combine uncertainty honestly. An uncertain causal effect and an uncertain margin produce an uncertain economic conclusion. Show the threshold at which the choice changes or compare credible ranges when a point estimate would conceal the issue. The largest expected contribution can still be infeasible because of cash timing, scarce staff or obligations to current customers. MKT.11 supplies actual delivery conditions; its missing capacity is not repaired by a favourable average return.

Use nonmonetary consequences in their own terms where no adequate conversion exists. A client’s ability to complete important work, burden and experience can affect the decision without a fabricated price. State whose objective is served and what trade-off the decision maker accepts.