Tag Archives: LTV

The Incremental Giveth… and Taketh Away

De-averaging your marketing investments and paying close attention to how your incremental marketing investments pay off is a post I’ve been intending to write for a while now.

The good folks at Rimm-Kaufman group, however, saved me the trouble with yesterday’s excellent PPC Averages can Hide Incremental NightmaresPlease take the time to read it.

As I was reading it, I started to think about applying LTV to the methodology.  When you think about making decisions based on LTV, the story becomes even more clear.  All will be revealed (with a graph!) after the break.

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Is LTV the first step in my marketing plan?

istock-spreadsheet-compressed.jpgHow do you make money?

This is one of the first questions I ask all my clients. The answer usually comes back including some aspect of “buy low, sell high” and other margin-related facts. Regardless of the complexity or depth of the answer, one word is always included.

The magic word is “people.”

So why isn’t all marketing done on customer lifetime value (LTV)?  What are the five things you need to consider when developing LTV-based models that allow you to build CPA (cost per acquisition) based marketing plans?

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