Maybe the most fun aspect of my work is that I have many colleagues from both the online and the offline marketing worlds. So I get to learn and compare the view points of both sides. Sometimes, both sides have different names for the same thing (e.g. ad view through vs. response attribution). Yet, things get really confusing when both sides share a term yet attribute different meanings to it. This is the case when it comes to “Life Time Value”.
Web analysts know all about Life Time Value, don’t we? Clearly, it is a metric. We judge which of our online campaigns or paid keywords are worth their investment by this metric. For this assessment we don’t just consider the returns achieved in the initial visit after the ad clickthrough, not even just the returns from a delayed conversion in a subsequent session, but we sum up all of the subsequent repeat purchases from all of the customers that were initially attracted to our site via that particular ad. So, Life Time Value is one of the most valuable metrics that we use for our decision support.
Offline marketers, especially direct marketers, smile to that. Offline marketers have been at this a bit longer than Internet marketers. They haven’t just started getting serious about metrics seven years ago when our Internet bubble burst. To offline marketers Life Time Value is a call to action! Namely, the call is for maximizing the value of each customer by not just measuring what they have done, but by conducting right-time, event based marketing. Call it direct marketing, call it one-to-one marketing, call it personalization, or call it customer-centricity. Offline marketers aim to get in front of their customers with offers and messages that are so relevant that they feel like a service rather than an interruption. They spring into action across channels in order to maximize each customer’s loyalty, wallet share, and life time repeat purchases. In that last sense, offline marketers use Life Time Value as a metric after all, namely to monitor the outcome of each action that they take so that they can maximize their success.
How do you use Life Time Value?