Comments on: Strategic vs. Tactical LifeTime Value

By: Jim Novo

Jim Novo — Tue, 25 Mar 2008 12:54:19 +0000

I’m not sure I understand the question, or the underlying question within the question, but will give it a try:

1. Find out who created them
2. Have that person explain them to you
3. Verify with management they are what is expected

Care to rephrase the question?

By: Danny Cruz

Danny Cruz — Fri, 21 Mar 2008 19:41:16 +0000

How do I know if an LTV model was correctly created? How do I check if profiles are correctly created?

By: Steve

Steve — Sat, 02 Feb 2008 07:17:53 +0000

“IT was being a bit overbearing …”

I don’t doubt it! At risk of giving away secrets, this is a well used method of making requests go away. Make it so darn hard for people to enunciate what they want, that they don’t. I think our finance group (doesn’t) work on the same principle.

Want a blue cable to plug a PC into the network? You need to submit a complete Request for Service. Signed by your Director and their boss to release the funds for the task. We’ll send back a Statement of Service. Terms are agreed to, and then someone will eventually be dispatched with a new blue cable to plug the PC in.

Or to get a server appliance plugged into the main network: I had to write two page explanation, plus multiple diagrams, explaining how and where to plug a blue cable within the patch panel.

I *wish* I was making up the above examples….
Outsourcing. Gotta love it.

Ahh. I’m wandering off topic in a big way.
Cheers!
- Steve

By: Jim Novo

Jim Novo — Fri, 01 Feb 2008 12:51:25 +0000

Steve, I agree with the spirit of what you are saying and many Marketing folks are extremely guilty of not knowing what they want or how to ask for it. That said, in this case, IT was being a bit overbearing in asking for the “one, universal, comprehesive formula for LTV” including activity-based costing and so forth.

Now, that’s an important strategic concept, but it’s not what a campaign-focused marketer needs or frankly, should be responsible for. The inputs for that kind of formula need to come from the CFO / COO level.

In case the point wasn’t clear (and may not have been!) I think a lot of people abandon their efforts to understand LTV because they think getting there will be too complex.

But you don’t have to develop a full-blown strategic level CFO / COO LTV model to understand and use the concepts of LTV in customer marketing. The “relative LTV” approach and the LifeCycle Grids are two much less painful alternatives to a strategic LTV model.

By: Steve

Steve — Fri, 01 Feb 2008 02:44:08 +0000

“…because if the data and structure are right, you can run any formula / query any time you want”

Broadly speaking – this is correct.
Where it is useful to IT to know what sort of questions you do want to ask, is that they can optimise the code, the database, and even the underlying hardware, such that those queries don’t require several lifetimes to finish.

As everything, It Depends. :-)

Generally, the more information you can give IT, both detailed formulae and really broad-brush “this is what I want to do and why”, will help them give “you” a far better solution.
Give them silk, you will get a silk purse. Give them a sow’s ear….

Cheers!
- Steve