Calculating the Lifetime Value of a Customer
÷ Cost (out of pocket costs x costs of employee time)
Org quickly understood the financial logic of what his longtime friend was saying. “Over time, we’ll discover which activities are the cost-effective methods for acquiring sales and which aren’t. Numo, you really are a cost controller!”
“Thank you, thank you,” Numo said, taking a bow.
Today’s FIRE! Point
Tracking the cost of each sales conversion will allow your printing company to determine the ROI of your promotional activities and consequently make more financially intelligent marketing decisions in the future. Using this data, you can easily calculate the “Lifetime Value of a Customer (or Lead)” and, consequently, the ROI of each marketing promotion.
FIRE! in Action
Making It Measurable on the Web
For Babs Rangaiah, VP of global communications planning at Unilever, Internet marketing programs can be tracked just like any other campaign. Rangaiah records the amount of brand touches based on user views, shares, comments, etc. and measures this against an increase in sales to see if the effort yielded an ROI.
Next week: The FEI tribe discusses tracking ROI of sales activities.