Measuring Customer Lifetime Value with Marketing Engineering for Excel ME>XL
Presented by: Dr. Arnaud De Bruyn
Assistant Professor of Marketing, ESSEC Business School and Associate Research Program Director, ISBM
March 13, 2008
In today’s fierce competitive environment, acquiring new customers –and keeping them– has become marketing's Holy Grail. While acquiring new customers and loyalty programs become more expensive, companies rightfully see these costs as worthy investments only when they consider medium and long-term benefits. With the increasing focus on and use of marketing metrics, today’s marketers must make and justify such investments systematically.
Yet, it is not easy to calculate the long-term monetary value of a customer and few companies, especially in the Business-to-Business domain, use Customer Lifetime Value as a guiding metric to gauge the effectiveness of their marketing programs. If it is expensive to acquire a new customer, will that investment pay off? What is my customer list worth? How much revenue will my current customers still be generating five years from now, and how many new customers do I need to acquire by then to compensate for the loss of those not around? If my retention campaign reduces my customers’ churn rate by 10%, but is very expensive, is it still profitable?
In this webinar, Dr. De Bruyn will review a range of customer lifetime value concepts, linking marketing strategy and customers’ observed behaviors to predict their direct and indirect future value. He will introduce a tool called Customer Lifetime Value, part of the Marketing Engineering for Excel (ME>XL) toolkit that is designed to implement one of these approaches. He will conclude by discussing how participants can make immediate use of the concepts and the related software.