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 the metric that may, or may not, make sense. You want more on…
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Accounting For Brands
In a 2003 piece Tony McAuley discussed the history of accounting for intangible values. He interviewed Michael Schurch, CFO of RHM (Rank Hovis McDougall). They discussed the company’s decision to add the value of brands to the balance sheet back in 1988. This created a bit of a stir at the time, and has influenced accounting for…
Accounting For Marketing
Accounting for marketing deserves more consideration. Neither accountants nor marketers seem to give it much thought. That is a shame. It is a key area for understanding business. Yet, few are experts in it. Accounting For Marketing I think that there is a desperate need for marketers to understand accounting. Indeed, I think a lot…
The Tyranny Of Random Facts
BCG have a new piece on measuring marketing results: Making Sense of the Marketing Measurement Mess. There is a lot to like in it. They discuss the tyranny of random facts. Questions To Ask About Marketing Metrics The authors describe a number of questions to ask about marketing metrics. “Do the metrics and tools capture…
Teaching CLV Badly
Ex-Ivey PHD student and now University of Calgary professor, Charan Bagga, and I have just published an article. This focused 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. Teaching CLV badly seems to be the default way to teach…
Hovis And The Valuation of Brands
Today we turn to a history lesson on brand valuation. The story is of Hovis and the valuation of brands. Hovis And The Valuation of Brands Rank Hovis McDougall, a big U.K. food manufacturer in the 1980s decided to record the value of its brands on its balance sheet. This included its internally generated brands. (These are…
Data Without Small T Theory
Standard Deviations Gary Smith’s impressive Standard Deviations book concerns an important point. Statistically inclined people often seem to miss that theory small t matters. Smith is keen to note that data isn’t enough on its own. “Data without theory… is treacherous” (Smith, 2014, page 233). Smith describes a case of a cholera outbreak. This outbreak…
What Is Wrong With This CLV Formula?
Peter Fader and Bruce Hardie are experts in understanding the value of customer relationships. They have offered advice on problems with CLV calculations, especially those taught in MBA programs. They ask: “What’s Wrong With This CLV Formula?” Five Issues They outline five issues. Many of these are things to bear in mind that we might…
Understanding Brand Valuation
Marc Fischer explains common methods of brand valuation. His work is useful in understanding brand valuation. Different Methods Of Brand Valuation One of the problems he highlights is that there are so many methods. Different companies have their own proprietary valuation systems. He groups these into three main approaches; a cost-based approach, a market-based approach, and an…
CLV In The CPG Industry
V Kumar (the editor of the Journal of Marketing) and student Sarang Sunder have undertaken a review of the use, and potential use, of Customer Lifetime Value, CLV in the CPG industry. (CPG being consumer packaged goods, think P&G, General Mills). Challenges For CPG Marketers The authors talk about the problems that CPG marketers face…