Marketsmith, Inc. - Marketsmith in the News

In today’s world, a lifetime needs to be defined. We always recommend that our clients’ marketing returns should be in-line with the way incentives are offered to marketing executives. The reality is our jobs are based on results in a 12-month period, broken down and built on four quarters. We are not given a lifetime to perform. Why should our customer strategies be built that way?

Contact strategies can make or break a company. The number of poor decisions or misinformed decisions is staggering. Today, we see companies who participate in making informed decisions experience increases year over year as high 9000% - without exaggeration. The cost to acquire both online and offline needs to be measured and audited down to a variable contribution level. It is part of the Marketsmith mantra that this is the only way to create effective plans AND grow.

We have had great success in identifying and implementing changes based on lifetime value data. Recently, Marketsmith performed expanded lifetime value analyses for a leading uniform and apparel provider. Because this company had a B2C and a B2B component, we evaluated results by a dozen individual variables, and by consumer and business purchases. Our results pointed out that the weakest long-term customers were derived from mail-order. For the business segment, we showed a direct relationship between customer employee size and total average contribution per customer. We found the more product categories that are included in the initial purchase, the greater the lifetime value. We identified strong lifetime value through the phone channel which has implications for the creation of a follow-up program through that channel.

For a high-end floral provider, we analyzed three books focusing on catalog, channel, age and gender. We identified the specific lists that performed well and had strong positive lifetime values, saving significant future resources otherwise spent on underperforming lists. We also identified the need for improving their data collection, which is critical in assessing effective spends and designing the optimal contact strategy.

For a high-end multichannel European gift and home décor merchant, through lifetime value, Marketsmith identified a significant cost savings for the company in the discontinuation of prospecting in the spring and the identification of several well-performing lists.

As a multichannel marketer, you want to make sure you are maximizing your efforts and achieving the best possible ROI. Lists, advertising, paid search, organic search, promotional offers, affiliate relationships, and more are all vying for your limited resources. You have information about your customers in additional to original source, such as previous product category purchases, responses to promotional offers, seasonality, and demographics which may affect future purchase behavior. Our expanded lifetime value analysis measures the total contribution by customer segment/source over a 12 to 18-month period. This analysis will enable a company to identify online and/or offline sources and/or customer segments by previously purchased product categories, or other characteristics or behaviors which should be targeted for future marketing efforts. The results of the expanded LTV will identify the most desirable customer segments and help you make the best business choices in disbursing your marketing resources.

We can calculate LTV by any variable that is available on the file and may affect the LTV, such as original source of name, initial product category/categories purchased, promotional offer, any available demographic variable and initial order value. Here are some of the questions this expanded lifetime value can answer:


	Do customers who have previously purchased specific categories or products perform better than purchasers of other products/categories over time? Are these results tied to particular promotional efforts?
	Does purchase channel give an indication of long-term customer value?
	What is the performance of customers from paid search, organic search, affiliates, email marketing, other web sources over time? How do those results compare among sources? Which ones are most cost-effective?
	Which offline sources are most effective?
	How do online and offline sources compare in terms of costs and long- term value?
	Do customers who came onto the file in a particular season perform better over time than those who came on in a different season?

To give a true picture of the customer value over time, it is important to look at long-term contribution. The calculation begins with the initial performance of a given group of customers, and takes into account all costs relevant to the sales generated, not just advertising or marketing costs. Some companies refer to an ROI where they apply margin dollars against the advertising cost to get an ROI percentage. Margin percentage is only one of the costs we consider. Additionally, we include a discount for the time value of money.

We turn around a LTV analysis in ten business days after we receive the necessary data. We work with date in any format- the more data elements that are provided to us, the more accurate we can be in the calculations, be more statistically confident in the conclusions and able to provide greater insights into your customer base. We examine such variables as product categories purchased, promotions versus none, seasonality, customer demographics, personas, cost of paid search terms, numbers of customers acquired, true acquisition costs and retention rates for sources across channels.

Most importantly, we don’t just calculate a number and let you figure out what to do with it. Our analysis comes with a road map detailing what it all means and what should be your next steps. We tell you how you can use this analysis as part of an action plan to create the most effective marketing operations. Looking at customer value over time by a host of variables gives a company a powerful understanding of how customers are behaving and how best to grow the customer base.

Marketsmith’s extraordinary results for its clients, one after the other, are coming from the ability to leverage this tool daily. Call today and ask about the offer we are offering during the month of March, called "March Madness," and have your LTV back in ten days for $7,500, together with a written roadmap of where to go from there. Contact Susan Pizzano at spizzano@marketsmithinc.com or call 973.889.0006.