Customer Value

Everyone stresses the importance of ROI. And there is no argument. It is important. But there is something more important to have at the front of your mind.

And this concept is dead simple. Customer value.

More than anything else, it is customer value that should be behind every marketing decision you make.

If each customer on average gives you a profit of $10,000, your marketing decisions can be very different from the case where each customer gives you average profit of $200.

Mercedes, for example, can no doubt do a successful acquisition campaign where the response is very low. A few good hits will give them sufficient profit to well and truly pay for the campaign. It’s obviously not like that for everyone.

When it’s time for decisions about the investment you are prepared to make, the value of the offer and the amount you can spend on fulfillment, customer value should be your guide.

Where the profit per customer is very high, it does not make sense to quibble over an extra few dollars for faster fulfillment. But if the customer value is low, you have to look more carefully at every cent you spend on acquisition.

There are many important metrics in marketing but no metric is more important than customer value.