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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

As long as there are strong increasing returns to create , it’s possible that the net present value of my profit harvesting is indefinitely larger if deferred to the future. The Refresher: Net Present Value. Invest today to build an ecosystem, demonstrate value, drive network effects, and create customer loyalty.

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years.

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How Valuable Are Your Customers?

Harvard Business Review

At its core, CLV is the present value of all future streams of profits that an individual customer generates over the life of his or her business with the firm. The discount rate in the CLV equation calculates the present value of that future revenue and is tied to the current cost of money. x number of years).

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How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

These estimates can then help determine the Net Present Value (NPV) of the long term effect of marketing in terms of future sales. typically are short-term calls to action and contribute little to building the brand and consumer loyalty. customer surveys). Marketing analytics is far from a monolithic approach.

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Forget About That Cash Bonus

Harvard Business Review

The findings provide some guidance on the types of gifts that are likely to engender the greatest motivation and loyalty. In some versions of the experiment, a price tag was left on and catalogers were informed of the present's value, to ensure that the employees didn't overestimate it.)

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How CMOs Can Get CFOs on Their Side

Harvard Business Review

CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. It’s the CMO’s job to make sure that metrics reflecting the health and value of the customer base –net present value, lifetime value, return on loyalty, cost per acquisition – get on the balance sheet.

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