Most of you are aware of an exciting new measure we’ve been working on for a few months – Acquisition Contribution. It really is exciting, as you’ll see. This measure looks at the financial impact newly acquired operators have on Sponsors.
We compare a Sponsor’s total program spend to the revenue (margin) generated by their new customers. We found (Coalition Average) that 50% of the cost to participate in FSR is funded by new customers. That’s right, half of the program cost is self-funded through the acquisition of new customers.
Here’s how it works:
This measure is based on spend and new customer redemptions for a 12 month period. We identify new customers redeeming during that period and record their case redemptions. Here’s the new part…”New” customers are defined as operators who have been enrolled in FSR for 90 or more days before redeeming from a Sponsor for the first time. It’s the 90-day gap between enrolling and entering product codes that’s the key. On average, new enrollees to FSR redeem product codes within the 1st 20 days after joining. If an operator was already buying a Sponsor’s product, the operator would likely have entered codes before 90 days. By using a 90-day window to define an operator as new, we’re taking a conservative and realistic measure of new business through FSR.
To get our AC Score, we compare a Sponsor’s total program spend for 12 months to the margin generated from new customer’s redemptions for 12 months.
1) Please feel free to suggest a new name for this measure.
2) To provide a realistic measure, Sponsors must be in the program for more than 2 years.