They offered free ice cream on their birthday, and measured increased sales elsewhere in the store that resulted from this gift. In this example the retailer has cut his advertising budget in half. With the resulting savings, he has boosted programs for his valued customers. This is real profit, since the costs of the new programs have already been factored in. These charts don't tell you that the programs will be a success.
Poor execution can ruin any well laid plan.
But lifetime value analysis tells you that your programs can be successful. Many programs fail because this type of analysis has not been done in advance. Increasingly marketers are realizing that the techniques used to measure success guide their strategy. Lifetime value, as a measurement, is preferable to basing your strategy on numbers of customers, market share, or total sales. Database Marketing provides Customer Management and Internet Marketing services.