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Calculating the Lifetime Value of a Customer

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Calculating the Lifetime Value of a Customer

Calculating the Lifetime Value of a Customer

What is one customer worth to a business, and what should a business be willing to pay to acquire the said customer?

It all comes down to a concept called “customer lifetime value”, which is used to describe the approximate value of one customer to a business. It is essentially the average amount of money made over the lifespan of an average customer, discounted by future cash flows.

The higher the value, the higher the marketing budget can be to acquire each customer. This is not only a key concept to understand in business, but also for investors that are looking to put money in consumer-oriented companies.

Original graphic by: KISSmetrics

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Misc

Airline Incidents: How Do Boeing and Airbus Compare?

This graphic shows U.S. airline incidents across the two largest aircraft manufacturers in the world as Boeing faces increased scrutiny.

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This area chart shows airline incidents across Boeing and Airbus since 2014.

Airline Incidents: How Do Boeing and Airbus Compare?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

For decades, the global airline manufacturing industry has been run by a duopoly, split between American titan Boeing and European manufacturer Airbus.

After years of safety issues, the American aircraft manufacturer has come under fire after a door flew off a Boeing 737 MAX 9 on an Alaska Air flight in January, which recently led its CEO to resign. This incident follows two fatal crashes of its aircraft in 2018 and 2019.

This graphic compares the number of U.S. aviation incidents between Boeing and Airbus, based on data from the National Transportation Safety Board.

A Closer Look at Airline Incidents

The U.S. stands as Boeing’s largest market, comprising 58% of annual revenues in 2023.

By contrast, North America was Airbus’s third-biggest market, making up 21% of annual revenues, following Europe and Asia. Below, we show the number of aviation incidents between the two giants since 2014 in the U.S. and international waters:

YearBoeing IncidentsAirbus Incidents
2024204
202313740
202211132
20219924
20205822
20198637
201811225
201710824
201610222
20157121
20146613

*Data for 2024 up to the end of February.

So far this year, Boeing has faced 20 incidents, with the Alaska Air flight as the most high-profile case due to missing bolts in the emergency door causing it to fly off the hinge.

One potential driver that has been identified by the company is that employee bonuses have been heavily tied to financial incentives. Prior to the incident, they accounted for 75% of annual bonuses in its commercial unit, with the remainder tied to operational targets that included safety and quality measures. Now, as the company overhauls its production process, the company is making safety and quality metrics 60% of the annual reward.

For many years, Boeing has faced safety concerns with its aircraft, leading regulators to ground its 737 MAX 8 planes for two years after a fatal crash in 2019. Making matters worse, aircraft regulators have faced sharp budget cuts since 2013, allowing manufacturers to “self-certify” their planes on safety requirements.

Yet quality issues are not exclusive to Boeing. In some of the latest deliveries for Airbus, customers have raised quality concerns along with complaints of delays. In January, for instance, an Airbus A319 plane on a United Airlines flight made an emergency landing due to a potential faulty door.

Leading up to this point, incidents for both Boeing and Airbus hit decade-highs in 2023 amid a record 16.3 million flights in America. The good news is that there were no reported fatal accidents across passenger jet aircraft in 2023. In fact, there have been no fatal crashes across U.S. airlines in almost 15 years.

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