When you are able to calculate the Lifetime Value (LTV) of a customer, you know how much net profit is likely to accrue from each new customer. That tells you how much you can afford to spend to acquire a new customer, and can help you make intelligent decisions about how best to acquire customers.
However, while marketers talk at length about customer Lifetime Value, relatively few ever implement it. Fewer still calculate it regularly as part of their marketing analytics.
One reason is that without an integrated marketing database, marketers have huge challenges in bringing all the components of customer Lifetime Value together in one place. Customer Lifetime Value uses many metrics – average sales, COGS, retention rates, marketing expense, the present value of money, and more – to calculate the profit you will realize on the average new customer over time.
WiseGuys gives you a way to aggregate all of the data you need, and do sophisticated Lifetime Value analysis on an ongoing basis.
Combine PPC with LTV
Imagine what you could do with your Google AdWords account if you knew the Lifetime Value of customers who click on certain keywords instead of just the dollar value of their first purchase transaction? How would your bidding strategy change?
For example, you might discover that certain keywords delivered customers with a higher Lifetime Value, and therefore you could justify bidding more on those keywords.
Ask us about the details.
LTV Excel Spreadsheet
Measuring customer retention is a key component of Lifetime Value, and provides a way for you to get started with LTV analysis. Contact us for a free copy of our LTV Excel spreadsheet template. You can do a simple calculation of Lifetime Value and perform what-if analysis on the variables from your own organization.
You’re Invited – Attend Webinar on LTV
How to Calculate Your Lifetime Value (LTV)
‘Webinar Wednesday’ – the 1st Wed. of each month.
In this 30-minute webinar, you will learn a simple method for calculating Lifetime Value using information already available in your order management system. You will receive a free Excel spreadsheet with the Lifetime Value formulas you need.
Every attendee gets a free 30-minute consultation to discuss how to calculate Lifetime Value in your specific situation.
