Monetisation · Margin structure · Component
The contribution analysis
What each customer, product or segment contributes after its own costs — the view that decides where to put effort.
The deliverable
What it is
Contribution analysis reliably produces the same shape: a small group generating most of the contribution, a middle that pays its way, and a tail that costs money.
The finding is easy; the response is not. Cutting the tail rarely removes its costs, because much of what it consumes is capacity that remains.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
The contribution
Revenue minus attributable cost, per customer, product or segment.
3 attributes: Contribution · Contribution rate · Unit of analysis
LearnThe distribution
How contribution is spread — the concentration at the top and the shape of the tail.
3 attributes: Top decile share · Loss-making count · Tail cost
LearnThe response
What is being done about the tail — reprice, re-serve, or exit.
3 attributes: Response · Owner · Expected effect
Learn
Try repricing the loss-making tail before exiting it. Many accept, and those who do not have answered the question for you.
The other components in margin structure
The cost to serve model
What it actually costs to deliver to a given customer or segment, including the costs that are usually averaged away.
LearnThe scale model
How margin behaves as volume grows — whether it improves, holds, or quietly deteriorates.
Learn