Table Table 2 Growth that compounds 2 September 2026

Which cost-to-serve boundaries belong inside the lifetime contribution margin?

Cost category	Treatment in CLV margin	Rationale
Direct product/license costs	Fully deducted	Direct cost of goods sold incurred per transaction or seat
Dedicated cloud/compute hosting	Fully deducted	Customer-specific infrastructure, storage, and API consumption
Customer success and account management	Proportionately deducted	Dedicated personnel time required to prevent churn and ensure implementation
Payment processing and billing fees	Fully deducted	Direct transaction overhead incurred with every collection
Technical onboarding and setup	Deducted in Period 0 or 1	Initial fulfillment investment required to bring the account live
General corporate overhead (SG&A)	Excluded	Fixed costs of executive management, legal, and general facilities

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What is customer lifetime value?

Customer lifetime value is a discounted forecast of net contribution margin over a defined horizon, not an observed customer attribute.

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Isoglu, S. (2026). Which cost-to-serve boundaries belong inside the lifetime contribution margin? [Table]. isoglu.com. https://isoglu.com/insights/exhibits/isoglu-2026-what-is-clv-fig02/

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@misc{isoglu-2026-what-is-clv-fig02,
  author = {Isoglu, Sinan},
  title = {{Which cost-to-serve boundaries belong inside the lifetime contribution margin?}},
  year = {2026},
  howpublished = {Table 2, isoglu.com},
  url = {https://isoglu.com/insights/exhibits/isoglu-2026-what-is-clv-fig02/},
  note = {From the essay {What is customer lifetime value?}}
}

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Which cost-to-serve boundaries belong inside the lifetime contribution margin?

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