mma forum brasil - track 07 - lifetime value adknowledge

How to use data to uncover the lifetime value of your customers and optimize your marketing for the best ROI on your marketing spend

Ben Legg, CEO Adknowledge

Using Lifetime Value to Optimize Your Digital Marketing Investments

@bglegg

@adknowledge

2 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI

Data Source - Gartner

The Digital Marketing Landscape is Overwhelming…


Which Adtype Should I Use?


Where Should I Show My Ads?


How Can I Track and Analyze Users?


What Should I be Measuring?


Who can help me?


5 x 1028 Potential Ad Permutations


ROI: Customer Lifetime Value


‘Two-Thirds of CMOs believe ROI is the primary measure of effectiveness. But half of all CMOs feel insufficiently prepared toprovide hard numbers.’

- IBM CMO Study


Cost to Acquire a Customer Will Keep Increasing...

Source: Fiksu

$0,88

$1,27

$1,05

$1,22

July 2013 July 2014

Android

iOS


Lifetime Value (LTV) –The Core Metric for Marketing


Spend per order $ 15

Cost per order $ 8

Profit Per Order $ 7

Traditional Measurement of ROI

Transactional View


We Eat Pizza More Than Once...The LTV is the amount of profit you make from a typical

customer over the entire lifetime of your relationship

Spend per order $ 15

Cost per order $ 8

Profit per order $ 7

Number of Purchases per Year 12

Average Lifespan of Customer 5

Cumulative Profit $420

Customer Lifetime View


If you were Dominos, what would you rather spend to acquire new customers?

Question:

A B C$ 50 $ 150 $ 300


* Churn plays a huge factor as well.

Average Order

Cost Per Order

Profit Per Order

Purchases Per Year

Lifespan of Customer

Lifetime Profit

Acquisition Costs

Profit Per Consumer

$ 22.50

$ 12.50

$ 10

26

10

$ 2,600

$ 300

$ 2,300

$ 15

$ 8

$ 7

12

5

$ 420

$ 150

$ 270

$ 12

$ 7

$ 5

3

1

$ 15

$ 50

$ -35

MR. BEST MR. AVERAGE MR.NEGATIVEEXAMPLE

All Consumers Are Not Created Equal


LTV – for Loyal Customers of Key Brands

Sources: Service Profit Chain, KISSMetrics

LTV helps marketers understand:

How much their customers

spend

How often they spend it

What campaigns motivate

buyers to become customers

for life.

The LTV metric shines light into marketing’s biggest blind spot—the

junction where long-term value begins to outpace short-term gain

$ 8,000 $ 11,535 $ 332,000


What are the Barriers to LTV?

If LTV is critical why aren’t more marketers doing it?

Lack of Awareness

Higher barrier to entry

Difficult to calculate

Time pressures to show results quickly


• Data Inventory

• Data Collection

• Data Hygiene

• CRM Database

• Segment

• Understand

• Message

• Optimize

• When you find

something that works -

uncap your budgets!

Think Big. Start Now. Scale Fast.


Plan: Your CRM Database is Critical to Success


Bringing it all Together

TARGET REGION,

AGE 18+

API INTEGRATION

ZIP CONDITIONSCREATIV

ECTR CVR IMP

10001 Hurricane Ad 1 1.30 25% 1,000,000

10002 Thunder Storms Ad 2 0.93 13% 1,000,000

10003 Rain Ad 3 1.01 20%1,000,000

Utilize Real-Time Data to Deliver Your Message in a Way that Increases the

Lifetime Value


Test, Test, Test…

1 Segment

2 Understand

3 Message

4 Optimize


Scale Fast

“Houston, we have

uncapped the

budgets!”


Marketing is all about Creating Value

LTV provides the means to create shareholder value

SHAREHOLDER VALUE

High

Value

Mid

Value

Low

Value

AVERAGE

NUMBER OF CUSTOMERS

LTV

SOURCES OF VALUE CREATION


[email protected]

1.816.591.8758

@bglegg

www.linkedin.com/in/benlegg

mma forum brasil - track 07 - lifetime value adknowledge

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