the golden metric: customer lifetime value
TRANSCRIPT
The Golden Metric Customer Lifetime Value
Santi Pierini, CAKE
Mike Stocker, Marketo
Housekeeping
This webinar is being recorded – the slides and recording will be sent to you after the webinar is over
Ask you questions in the chat box – we will do a Q&A session later
Feel free to tweet during the session! – #mktgnation
– @spierini
– @michaelstocker
Meet the Speakers
Santi Pierini President
Mike Stocker Director of Business Development
Agenda
The Marketing Challenge
The Anonymous
Customer Journey
Calculating Customer
Lifetime Value
Case Study: Redstone
Q&A
1
2
3
4
5
$137.5B In digital advertising spent in 2014
We are spending a lot of money on
digital advertising
Source: eMarketer, October 2014
“82.2% of marketers do
not have the ability to
measure cross-channel
performance or return
on investment.”
Laurie Sullivan
Multichannel Marketing
The Digital Marketing Challenges
Dealing with Fragmented Tools & Data Silos
Limited Visibility into the Customer Journey
No Ability to Measure Cross-Channel
– No Digital Marketing Effort ROI
– No Customer Lifetime Value
– Lack of Lifecycle Marketing
“82.2% of marketers do
not have the ability to
measure cross-channel
performance or return
on investment.”
Laurie Sullivan
Multichannel Marketing
60%* of the Customer Journey occurs
before they have spoken to sales
*Corporate Executive Board
Where to begin?…
Where to begin?…
Anonymous Customer Acquisition
provides deep insights across the
customer journey by measuring
cross-channel cost and performance
Tracking:
All Digital Channels
Attribution:
Multi-touch Conversion Attribution
Optimization:
Performance Targeting
Integration:
Mktg Automation, Search, Display, etc.
Anonymous Customer Acquisition
Tracking, Attribution, Optimization & Integration
Mobile
Display
Video
Social
Search
Shopping
Affiliate
Engagement
Anonymous Customer
Acquisition
The Golden Metric – Customer Lifetime Value
Think about Customer Lifetime Value as a gym
membership…
Gym Membership Alone
Revenue
Contract Length 23
Monthly Charge $25.00
Membership Revenue $575.00
100% Revenue $575.00
Retention Rate 50%
Discount Rate 5%
Customer Lifetime Value $522.73
CLV = Profit ($) * Retention (%) / (1 + Discount (%) – Retention (%))
But there is more to Lifetime value
Think about Customer Lifetime Value as a gym membership
Gym Membership Alone Plus Upsells
Revenue
Contract Length 23 23
Monthly Charge $25.00 $25.00
Membership Revenue $575.00 $575.00
Trainer ($80/month, 3 months) $240.00
Specialty Classes ($10/month) $230.00
100% Revenue $575.00 $1,045.00
Retention Rate 50% 50%
Discount Rate 5% 5%
Customer Lifetime Value $522.73 $950.00
The Loneliest Customer Metric
But Why?
Now add in the Cost Per Acquisition
Cost Per
Acquisition
Life-Time Value
Balancing CLV and CPA
Track and Adjust your marketing
spend until your CPA is
optimized with your CLV
RedStone Federal knows that when their
customers are more engaged and upgrade their accounts that their total customer lifetime value will increase.
With this valuable information, RFCU can use CLTV metrics to justify:
Additional customer acquisition
New branch openings
Customer education on new products and services
Results RFCU has been able to create a true content
marketing strategy
Success was so overwhelming, marketing had to slow campaign emails because of too many conversions
In 7 weeks, the campaign hit 1/4 of annual online revenue goals
140,000 email sends with 2,400 content downloads, 5,500 new or upgraded accounts
Marketing Intelligence: The Challenge & Solution
The Challenge The Solution
• Fragmented Tools & Data Silos • Poor Visibility into
Customer Journey
• Don’t Understand Behaviors
and Context
• No Cross-Channel Measurement • No Digital Marketing ROI
• Lack of Lifecycle Marketing
• Track the Complete Journey • Anonymous Web Surfing
• Prospect Nurturing
• Customer Lifetime Value
• Attribution for Every Step • Give credit as appropriate
• Don’t lose sight of the value
of each touch
• Optimize Digital Marketing
for the full, tracked cycle
Best Practices for Growing Customer Lifetime Value
• Customer Satisfaction
• Good Customers
• Tailor product/Offerings
• Good User Experience
• Build Habits
• Make Metric Driven
Decisions
Q + A
Santi Pierini [email protected]
Twitter: @spierini
www.getCAKE.com
Mike Stocker [email protected]
Twitter: @michaelstocker
www.marketo.com