Category: CLV
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Market-Based Assets: An Important Idea
The concept of Market-Based Assets was introduced to tackle a major marketing (indeed business) problem. Many managers too often see marketing simply as an expense. By this logic marketing does not deliver, or at least is not expected to deliver, any long terms benefits. Being treated as an expense makes marketing a prime candidate to…
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A Set of Metrics
The Canadian Marketing Association (CMA) have produced a set of metrics to capture performance. I would like to improve the definitions. In addition, the set more coherently presented. (For example, why squish retention and acquisition together in the list below?) Still, it is an interesting view on what marketers think. CMA Task Force The process…
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Good And Bad Profits
Fred Reichheld is best known for his (over) exuberant advocacy of the Net Promoter Score. Introducing Net Promoter he suggests a difference between good and bad profits; an interesting, though theoretically imprecise, idea. Are All Dollars In The Same? Short of outright fraud, isn’t one dollar of earnings as good as another? Certainly, accountants can’t…
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CLV And Limited Capacity
Customer Lifetime Value (CLV) is a great thing to calculate. It encourages marketers to take the numbers seriously. It helps finance people see the numerical basis of marketing. Calculating CLV encourages you to treat customers well; they are valuable and you have the numbers to prove it. Finally marketing’s influence probably increases when people think…
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Does Acquisition Cost Reduce CLV? No
Marketing suffers from serious definitional problems which undermine the communication function of metrics. For example, Does Acquisition Cost Reduce CLV? I therefore recommend a step forward; lets all exclude acquisition costs from customer lifetime value (CLV) calculations. CLV Is The Net Present Value Of A Customer Relationship Customer lifetime value is the net present value…
