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The High-Stakes World of E-Marketing
Written by Steven Permuy, Partner Development Manager, Alterian
Strategic targeting and better accuracy through Customer Lifetime Value (CLV) increase in the number of communications sent tocustomer value segmentation and measurement In marketing, Customer Lifetime Value (CLV) is the customers, due to ease of execution and low-costassists in identifying the right types of potential present value of the future cash flows attributed to of implementation. Ironically, omitting to applyand current customers to work with -- and waiting the customer relationship. Use of customer the rigor of established direct marketingfor the feedback can even capture the same lifetime value as a marketing metric tends to place principles to online marketing, such as testing,drama of a reality television show in the process. greater emphasis on customer service and long- measurement and relevancy of content, results inless leads as customers increasingly unsubscribe,From our lobby windows, I can see the ongoing term customer satisfaction, rather than onconstruction of the much hyped Trump maximizing short-term sales. report emails as spam or implement their ownspam filters, and use multiple email addresses toInternational Hotel & Tower. It is slated to be 96 CLV can be calculated by evaluating items such as guard their privacy.floors tall upon completion, and with its sleek, the churn rate, the cost of retaining and servicingstainless steel façade and glassy, closed curves the customer and the revenue generated by the(reminiscent of Philip Johnson's postmodern customer. Assigning a potential total monetary While a company has to make money to beLipstick Building in Manhattan), it will be the figure to a customer is a useful metric for viable, if it elicits one-time order customers it isperfect complement to the city's ubiquitous marketers when evaluating the cost of customer not going to be viable for very long. That is whyskyline. acquisition. The complexity and uncertainty it's important to gain a better understanding ofI first heard about this building during the first surrounding customer relationships obviously the customer through periodically plannedseason of the then popular reality television series makes it impossible to make an entirely accurate analysis that identifies patterns that trigger"The Apprentice." The oversight of its estimate, but CLV is a good starting point when dynamic content-i.e., relevant and personalizedconstruction was a prize offered to the winner, aligning strategy and resources to identified communication. The 'spray-and-pray' (or 'batchwho, coincidentally, happened to be a Chicago customer segments. and blast') approach is typically a desperatenative. Where there are a small number of people that attempt to acquire customers in a short period ofdrive most of the business, as in travel and leisure time in the absence of focus and a well thought-High-Stakes Gambling (or gaming, in the forgoing case), customer out customer plan, which actually results in theDuring the first season of "The Apprentice" there lifetime value is particularly useful-i.e., where long-term alienation of a significant majority ofwas an episode that involved two teams that there are a disproportionate distribution of customers.headed to Atlantic City where they were transactions compared with the rest of theresponsible for registering gamblers at the 'Trump customer universe. An example from Aberdeen Group's researchTaj Mahal' Resort. The task was to lure gamblers titled "Sales Effectiveness: Getting Sales Back toto the casino by creating a new and unique game The less-is-more approach is the preferred way to Selling" (July 2007, Authors: Andrew Boyd andof chance for customers to play, and the team that operate a service-oriented business, but this also Noel Le) cites that the top strategic action takenbrought in the most money won. has to take into consideration the buying cycle of by sales managers in Best-in-Class salesthe customer being courted and the payback organizations is to focus on lead quality, not solelyThe team that won registered 776 players, while period for that interaction. Firms with cash-flow the quantity of leads coming down the pipeline.the losing team curiously registered 1,337! The problems or a small war chest tend to rely on It was further cited that increasing the quantity ofsuccessful formula of the winning team included whatever comes in the door to accomm... [download for more]
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