Marketing optimization is becoming vital for the marketing departments to contribute positively to the profitability of a business.
A question often asked is "What proportion of turnover should a loyalty program cost, and how long should it take before it begins to pay back?" While there is no finite answer to this - it depends on circumstances - a good loyalty program will pay back from the very beginning. Tesco's ClubCard - surely one of the biggest and best loyalty programs ever - made money from Day One.
We know that, in theory, building customer loyalty increases profits. But how can we measure how effective it is in reality? How can we predict the effect an investment in loyalty will have on the future of the business? While no method can ever be perfect, measuring loyalty's effect on Customer Lifetime Value (CLV) is one of the best - and most accurate - ways, particularly if the management wants to maximize customer profitability during the whole of each customer's life cycle with the company.
How to turn data into profits?
The increased interest that managers have shown over the past decade in CRM, customer databases, data warehouses, and data mining is a positive development. Having such a system in place provides essential data that can be analyzed to provide better business intelligence and decision-making support.
SCIFORT marketing optimization models and formulae will help you to understand and implement the financial advantage and power of predictive customer lifetime value calculation.