So, what we are saying is that to truly measure campaign effectiveness we need to measure the impact over the longer term.
We have all encountered (and maybe some of us have been…) that senior manager, returning from a conference and suddenly announcing that the answer to ailing performance and challenging targets is a customer lifetime value metric.
Forbes, Entrepreneur, MarketingWeek… some of the biggest names out there have said at some point in time that customer lifetime value (LTV) is the only metric that matters, and failing to calculate it can put you behind your competitors. So, is it the answer to life, the universe and everything?
A complicated metric, putting the complexities of lifetime value modelling simply, with just text, would be a feat for even the most literate data scientists – rather, it’d be easier to review our recent webinar on the subject.
But, loosely… imagine you’ve poured your heart and soul into the perfect marketing campaign. To use a recent example, how about a Black Friday promotion?
How can your brand truly measure the effectiveness of a single piece of direct marketing, in this case, a Black Friday offer? Typically, you may look at measuring spend during the promotional period for those people contacted versus a control group, to calculate the incremental spend per person contacted.
But, in this Black Friday example, there is more to consider than just the day itself. In the build up to the weekend, many hold back their wider purchases, whereas others may pull forwards to avoid the item they desire most selling out. Put simply, there’s more variables to consider than meets the eye.
Lifetime value modelling and metrics are complex, but worthwhile when applied correctly. Realise Unlimited have worked on lifetime value models for huge brands across many sectors, and in these instances, LTV forms a core part of the customer strategy.
Get it right and you can start to look at answering questions like how do I attract more high LTV customers; where should I focus my retention efforts; which customer experience pain points are most costly – how can I improve future value? Where are the opportunities? Get in touch today to discuss how lifetime value through Realise Unlimited can give you an easier measure of longer-term likely success.