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…

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

Which Adtype Should I Use?

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

Where Should I Show My Ads?

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

How Can I Track and Analyze Users?

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

What Should I be Measuring?

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

Who can help me?

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

5 x 1028 Potential Ad Permutations

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

ROI: Customer Lifetime Value

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

‘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

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

Cost to Acquire a Customer Will Keep Increasing...

Source: Fiksu

$0,88

$1,27

$1,05

$1,22

July 2013 July 2014

Android

iOS

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

Lifetime Value (LTV) –The Core Metric for Marketing

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

Spend per order $ 15

Cost per order $ 8

Profit Per Order $ 7

Traditional Measurement of ROI

Transactional View

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

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

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

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

Question:

A B C$ 50 $ 150 $ 300

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

* 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

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

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

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

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

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

• 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.

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

Plan: Your CRM Database is Critical to Success

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

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

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

Test, Test, Test…

1 Segment

2 Understand

3 Message

4 Optimize

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

Scale Fast

“Houston, we have

uncapped the

budgets!”

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

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

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

Questions?blegg@adknowledge.com

1.816.591.8758

@bglegg

www.linkedin.com/in/benlegg