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.