Let me start this post by saying that I have had good experiences with Qualtrics. I have used their survey panel services before, and would certainly do so again. (Assuming they want me as a customer after this blog post). Unfortunately their attempt to give advice on CLV is, let me use a technical British…
Category: Customer Lifetime Value
Management Accounting and Customer Recording
An area of marketing metrics where I am relatively positive about the future is what we might call customer recording. Such efforts tend to work best where there are contractual, or pseudo-contractual, relationships. Given these conditions exist we can go a pretty long way to understanding the value of a customer. Armed with this knowledge…
The Destiny of Accounting Measures of Customer Assets
In an optimistic piece Keiningham, Aksoy, and Bejou outline what they think the future of customer asset management is: how will such assets be treated? They note three big problems which have meant that (prior to 2006 and honestly still up to the present date) ‘customer assets’ have been managed pretty inadequately. They suggest that…
RFM: Recency, Frequency, and Monetary
Database marketing has evolved over the years. Nowadays CLV (customer lifetime value) is often recommended by academics, at least for customers with predictable payments. It is a bit more challenging to know how to rank customers with less predictable payments patterns. An old, somewhat crude method, was RFM (Recency, Frequency, and Monetary). Keiningham, Aksoy and…
What is CLV for?
Customer Lifetime Value is an important metric and it has potential to be valuable in running a wide range of companies. One thing that is useful with any approach is to say what is it for? This seems like too simple a question to be valuable but often that isn’t true. Asking ‘what is this…
Don’t Expect Marketing Metrics to be Magical
Michael Schrage tells us that customer lifetime value is a problematic measure but to me his criticisms seemed to be unreasonable. Firstly, I think he may be overegging his critique for effect. We might all have sympathy with that. You need to say something controversial to get attention. An editor might encourage you to go…
Cautions about using one industry to create examples for Customer Lifetime Value
Lloyd Melnick has a short and snappy book on customer lifetime value (which he terms LTV). At its best this is a useful insight into the games industry. There is a lot of detail there in a very easy to read form. For example, you will learn about ARPU (Average Revenue per User) and ARPDAU…
The benefits and challenges of customer valuation
V. Kumar is probably the most published author in marketing (strategy). He was editor of the Journal of Marketing (JM) until recently and is best known for his work in customer-based marketing analysis. In a piece in JM he outlines a number of ideas and findings around the use of customer valuation. There is much…
More on CLV
Customer Lifetime Value (CLV) is widely discussed in marketing. Unfortunately, given marketers rarely refer to anyone else’s ideas this just leads to lots of people having their own view. This means when one looks up CLV online you are very likely to get a view of CLV that may, or may not, make sense. David Hughes gives a very…
Teaching CLV Badly
Ex-Ivey PHD student and now University of Calgary professor, Charan Bagga, and I have just published an article on the teaching of CLV (Customer Lifetime Value). We surveyed the state of case-based teaching materials related to CLV and found them a pretty shoddy bunch. One problem is that many of the cases calculated CLV in a way…