Every time we use our credit cards, enter our phone numbers at the grocery store, buy pet food on Amazon, or like a post, we’re sharing intel that can help marketers sell to us.
The proliferation of digitized data generated with every transaction builds a detailed profile of who we are, what we like and what we’re, and those like us, are likely to purchase next. It allows savvy marketers to precisely calculate “customer lifetime value” and identify the strategies and approaches they need to get close to that number.
Solving the equation focuses marketing resources, streamlines marketing operations and maximizes marketing returns -- bottom line benefits for any business.
Customer lifetime value has its roots in the catalog industry. Catalog purchases identified for marketers who was doing the buying and where they lived, giving marketers trend data that led to reasonable inferences about future transactions.
The digital world and its sophisticated e-commerce platforms, mobile payments, QR code menus and social media addictions take the science up about 4 million levels.
"Solving the equation focuses marketing resources, streamlines marketing operations and maximizes marketing returns -- bottom line benefits for any business."
For businesses selling things to consumers, from bank accounts to zip-line equipment, customer lifetime value crunches a lot of data on the back end, aggregating customer and transaction data into a demographic profile. That profile allows them to anticipate trends, market accordingly and predict with reasonable accuracy the sales they can expect from those efforts.
It also creates legitimate privacy concerns that can bite businesses if they operate in ways that are less than transparent. Don’t do that.
The tools to capture customer transaction data and calculate a lifetime value are generally available and accessible. The benefits of learning to use them responsibly are worth it.
If you’re ready, let’s talk about it. With experienced industry veterans and a network of specialized consultants worldwide, we’d love to help you get organized around the customer lifetime value opportunity.
Connect with me at dennis.duffy@brandfederation.com and we can set up a call.
Dennis Duffy, Brand Federation founding partner and chief operating officer, is a skilled research analyst and a respected marketing communications leader with deep roots in the areas of direct marketing, customer loyalty, affiliate marketing, customer behavior analytics and natural/organic foods marketing and distribution. He’s been an operating committee member on the Direct Marketing Association’s (DMA) Retail Marketing Council and a case study editor for the Journal of Consumer Marketing. In addition to writing a variety of articles on direct, database and loyalty marketing, Dennis has delivered dozens of speeches at industry events in the US, Canada, South America and Europe.
Ready to build a brand that works harder and delivers more?
Let's talk about it. Contact us at info@brandfederation.com; (804) 441-8091.
