Ray worked with B-2-B and Consumer clients throughout the world ... including USA, Canada, Mexico, Asia, the South Pacific, Europe, the Middle-East, Central & South America, Africa.

This website is a compilation of Ray's 10 years on the Web.


Power Direct Marketing: The Book

The Value of Lifetime Value

Because "lifetime value" is mentioned a couple of times, a few more words about it specifically. And the meaning it brings to analysis.

You must make every effort to determine the lifetime value of your customers. This knowledge is the lifeblood of any direct response program designed to generate leads and donations, build traffic, or sell via mail order. Even if you have to guess in the beginning, you need to take a stab at it.

In most direct marketing programs you are either talking with your current customers, in an effort to gain more business from them, or seeking new business. In both instances you are trying to establish an ongoing relationship. A continuing buy/sell situation.

You are seeking more business from the same people you are already doing business with. And you are looking for additional and new business from others. Business that will also grow to a regular client relationship.

In both cases you’re talking about "lifetime value." How much this customer will be worth to you over a long period of time.

Some of the best at doing this—figuring and using lifetime value in their marketing programs—are department stores. They know how much you’ll spend with them if they get one of their store credit cards into your hands.

The credit card people generally—all of them—are equally good at doing this. American Express, Diners, VISA, MasterCard, plus the oil companies. They know what to expect—they know your lifetime value.

Mail-order marketers and fund-raisers are two more groups that use lifetime value to good advantage. They know how much they need to invest and how much they can invest to get you as a customer or donor. Because they know that over time you’ll be a customer of value or a donor of importance.

As you plan your direct response campaign, consider lifetime value. And the place it has in your program. As Michael LeBoeuf, professor of management at the University of New Orleans, says: "The big bucks aren’t in making customers. They’re in keeping customers."

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