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23download_doc-2.php - M 370 Session 4 I- Core CLV Analysis...

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M370 Session 4 I-Core CLV Analysis CLV Conceptual Overview 1. Database information on customer purchase behavior is predictive of future behavior. 2. Create customer segments based on this purchase behavior as soon as customer type can be identified. 3. Determine profitability of these segments 4. Append other data about prospective customers to this internal data to target the best potential customers for acquisition. 5. Manage the acquisition and retention of these segments independently to maximize results. CLV Analysis CLV Analysis (Cont) 1. Breakeven Periods: The time period required to fully recover all acquisition costs for a given customer segment on an NPV basis. 2. Basically the discounted cash flow associated with: Total Revenue- Total COGS- Marketing Acquisition Costs – ongoing Marketing Costs. CLV Analysis WE WILL DIG IN DURING CLASS CLV Anslysis Implications for Marketing Strategy 1. Firing Customers (Best Buy) 2. Segmenting acquired customers and Marketing based on profitability. 3.
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23download_doc-2.php - M 370 Session 4 I- Core CLV Analysis...

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