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Customer Lifetime Value and Customer Aquisition Cost reviews from a small business prespective, presented at Narayna Labs EGADE start up series...May 2014 by Dr. Salvador Trevino-Martinez, Global Marketing Strategy Professor. Tecnologico de Monterrey. For Lecture purposes only
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Customer Value: Business Value
Customer Lifetime ValueCustomer Acquisition CostDr. Salvador Treviño-MartinezNational Alumni Relations DirectorGlobal Marketing Strategy ProfessorTecnológico de MonterreyEGADE Business School
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AGENDA CUSTOMER VALUE
BUILDING CUSTOMER VALUE
CUSTOMER LIFETIME VALUE CONCEPT
FORMULA
APPLIYING IT TO YOUR BUSINESS
CUSTOMER AQUISITION COST CONCEPT
FORMULA
APPLYING IT TO YOUR BUSINESS
FINAL REMARKS
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MARKETING CLUES TO CUSTOMER VALUE
EXCHANGESATISFACTIONMUTUAL BENEFIT
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WISEGEEK.COM DEFINES CUSTOMER VALEIS THIS CUSTOMER VALUE?
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NIKITA JETHANI´S PROPOSITION TO BUILDING CUSTOMER VALUE
IS THIS HOW YOU BUILD CUSTOMER VALUE?
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Customer Lifetime Value What is the value of a business relationship
over time? Loyalty over promotion value Measuring the so-called VALUE Two approaches: Qualitative AND
QUANTITATIVE
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Customer Lifetime ValueQualitative approaches
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Customer Lifetime ValueQuantitative ApproachFrom Farris and coauthors´ Marketing Metrics Textbook:
CLV IS DEFINED AS: THE NET PRESENT VALUE OF ALL FUTURE CUSTOMER CASH FLOWS DURING ITS RELATIONSHIP WITH THE COMPANY
FORMULA:
CLV =
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EXCERCISE From zeromillion.com site, a useful spreadsheet
http://www.zeromillion.com/marketing/determining-lifetimevalue.html
Instructions
1. Download spreadsheet
2. Enter actual or estimate information
3. What does the outcome value mean?
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CUSTOMER AQUISITION COSTGENERAL APPROACH
MUCH SIMPLER THAN CUSTOMER LIFETIME VALUE
THE IDEA IS TO ESTIMATE HOW MUCH MONEY IS SPENT GENERATING, MAINTAINING OR LOSING CUSTOMERS
GREAT INSIGHTS FROM THE DATABSE MARKETING INSTITUTE
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EXCERCISE http://
blog.priceintelligently.com/blog/bid/189868/A-Guide-to-SaaS-Metrics-and-Your-Pricing-Strategy-Customer-Acquisition-Cost
How do you apply this formula in your business?
What expenditure-items can you consider “acquisition costs”
What does the outcome of this formula imply?
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FINAL REMARKS IMPORTANCE OF CUSTOMER DATA AND RECORDS NON-INTRUSIVE; PERMISSION MARKETING APPROACHES FORMULAS ARE ALWAYS SUBJECTIVE AND SUBJECT TO
IMPROVEMENT DATA EVOLVES OVER TIME, THINK IN TERMS OF FUTURE
RELATIONSHIPS CUSTOMER LIFETIME VALUE AND CUSTOMER AQUISITION
FORM ARE TOOLS FOR DECISIÓN MAKING. SERVICING THE CUSTOMER IS WHAT REALLY MATTERS
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