Brent Chudoba of SurveyMonkey gave a presentation on lifetime value (LTV) to marketing students. He discussed how companies can calculate the lifetime revenue (LTR) of a customer by multiplying average monthly subscription cost by average number of months subscribed. For example, using $10/month for Netflix and an average subscription length of 18 months yields an LTR of $180. Companies aim to spend less than this on customer acquisition via marketing.
How online marketing works and how to optimize budgets automatically. Same presentation given in two different data science events in Helsinki this week.
Guest lecture given in introductory data science course in Aalto University on 2017-11-30. About how data science is used in online marketing by Facebook and Smartly.io
How online marketing works and how to optimize budgets automatically. Same presentation given in two different data science events in Helsinki this week.
Guest lecture given in introductory data science course in Aalto University on 2017-11-30. About how data science is used in online marketing by Facebook and Smartly.io
Metrics How To: Ratio of Customer Lifetime Value to Customer Acquisition CostFiresnap, Inc.
A marketing metrics tutorial. How to determine your Ratio of Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC).
Original Article Found Here: https://www.linkedin.com/pulse/how-calculate-ratio-customer-lifetime-value-acquisition-dustin-hall/
Customer Churn. Everyone loves talking about how to calculate it, how to reduce it, and how bad it is (us included!). But isn’t it time to sit down and figure out how we can actually influence it, and what actions we can actually take, given certain characteristics?
The Actionable SaaS Metrics series goes beyond measuring and calculating. It takes a deeper look at some characteristics of common subscription metrics, with the goal of identifying key actionable steps to optimize them for your business.
Acing the A/B Test: How to Optimize to Send Extraordinary EmailsMarketo
Emails have been around since the time of dinosaurs (maybe just the late 70s, but you get the point) - yet, nobody has ever sent the perfect email. While the perfect email might not even exist, how can you begin to create better emails with each and every send? Watch Tim Ozmina, Sr. Marketing Specialist, for his webinar, Acing the A/B Test: How to Optimize to Send Extraordinary Emails, where he dives into the world of email A/B testing.
You'll learn:
-What you should A/B test in your emails
-How to set up a proper A/B test
-How to accurately report on your results and make decisions
A comprehensive summary about the lifetime value predictions that Martin, Head of Marketing at AppAgent, has learned by building analytics platforms for clients and consulting with the best of the best in the mobile industry.
Calculating Your Customer Lifetime Value - Dawn of the Data Age Lecture SeriesLuciano Pesci, PhD
Not all customers are created equal. Finding the average customer lifetime value is a quick win for your organization, and you definitely have the data necessary to do it, but a closer inspection of your data will show that 1 in 5 of your customers is responsible for 80% of the total lifetime value. And that isn't even taking non-monetary CLV into consideration. To beat your competition for the best customers you need individual-level insights about the value of each customer.
This Lecture Will:
-TEACH YOU HOW TO USE YOUR DATA TO FIND AVERAGE CLV.
-EXPLAIN THE BEST PRACTICES WHEN DEALING WITH NON-MONETARY CLV.
-SHOW YOU HOW TO MOVE BEYOND AVERAGE CLV TO INDIVIDUALIZED CLV.
You can watch this lecture here: https://youtu.be/iCX-afWhmZ4
Reporting. As digital marketers, we know we have to pull reports and make sure goals are being met. It makes our clients happy, it makes our bosses happy. It’s easy to fall down the rabbit hole of metrics and analytics…before you know it, 2 hours have flown by and you don’t remember why you logged on in the first place.
We know its an essential function in the PPC world, but why do we spend so much time on reports when its such a time sink for us? And even more importantly, how can I turn the reports into action?
In the recording, Hanapin digital advertising experts plunge into the core of why we report and discuss best practices and personal lessons on how to turn your reporting into actionable items to increase success for your and your client’s accounts.
You’ll get expert-level PPC tips like:
*How to identify the important facts from report metrics and use it to increase performance
*Examples of ‘average’ reports
*How to turn changes in performance into successful account strategies
Start using your reporting more successfully and efficiently today!
"SaaS Metrics, how does to leverage the subscription economy?" by Patrick Cam...TheFamily
At TheFamily, we believe that anyone can become a great entrepreneur. Find more info here: http://www.thefamily.co/
- By Patrick Campbell, CEO at Price Intelligently (http://bit.ly/2iPRkKK)
- You can watch the full talk here here: (http://bit.ly/2iPMZan)
- Join us IRL next time: https://www.meetup.com/TheFamilyBerlin/
Voice to Text to Data to Insights : Speech Analytics solution overview
Unstructured Data Analytics
Contact Center Customer Experience Analytics
Key design principles of speech analytics
Driven by frequent tests, experiments or iterations, the lean startup seeks to gain insights by measuring user and market responses to its activities. Nevertheless, many startups struggle with effectively implementing the lean approach and we believe that a better understanding of business model analytics can change that for the better.
The purpose of this Best Practices session is to deconstruct the process of business model analytics to give entrepreneurs and practitioners a more concrete understanding of the analytical practices needed to drive the early stages of a new venture toward a validated business model. This session will take participants through practical and accessible methods for creating the right metrics, provide the context and use for each, and ultimately help to drive the venture’s key strategic decisions.
Analysis on Email Marketing Campaigns and Analytics to improve business decisions
You can find analysis and code to it here: https://pradeep.code.blog/2020/05/29/email-marketing-efficacy-and-business-decisions/
Speech Analytics: Increase collections while reducing compliance riskCallMiner Inc.
Debt collectors are challenged to maximize revenue collection while remaining compliant, and treating consumers fairly and with respect. Speech Analytics can help ensure agents are effective and compliant and that consumer data is protected.
Driving Value for Utilities using Speech AnalyticsPam Jeffries
Speech analytics can turn your call center recordings into insights that yield real business benefits. Built by our experts for a live webinar, these slides will share how speech analytics “as-a-service” capabilities can help your utility increase first-call resolution, lower cost to serve, and increase overall customer satisfaction.
The (Ultimate) Guide for Marketplace AnalyticsWilly Braun
We divided the guide in 2 parts: (1) marketplace dynamics, where we try to grasp the overall picture, (2) marketplace KPIs, where we make a snapshot of the different parts of the business and look at them overtime.
And as a super bonus, we’ve prepared an open-source dashboard (Google Spreadsheet) to structure your activity.
Metrics How To: Ratio of Customer Lifetime Value to Customer Acquisition CostFiresnap, Inc.
A marketing metrics tutorial. How to determine your Ratio of Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC).
Original Article Found Here: https://www.linkedin.com/pulse/how-calculate-ratio-customer-lifetime-value-acquisition-dustin-hall/
Customer Churn. Everyone loves talking about how to calculate it, how to reduce it, and how bad it is (us included!). But isn’t it time to sit down and figure out how we can actually influence it, and what actions we can actually take, given certain characteristics?
The Actionable SaaS Metrics series goes beyond measuring and calculating. It takes a deeper look at some characteristics of common subscription metrics, with the goal of identifying key actionable steps to optimize them for your business.
Acing the A/B Test: How to Optimize to Send Extraordinary EmailsMarketo
Emails have been around since the time of dinosaurs (maybe just the late 70s, but you get the point) - yet, nobody has ever sent the perfect email. While the perfect email might not even exist, how can you begin to create better emails with each and every send? Watch Tim Ozmina, Sr. Marketing Specialist, for his webinar, Acing the A/B Test: How to Optimize to Send Extraordinary Emails, where he dives into the world of email A/B testing.
You'll learn:
-What you should A/B test in your emails
-How to set up a proper A/B test
-How to accurately report on your results and make decisions
A comprehensive summary about the lifetime value predictions that Martin, Head of Marketing at AppAgent, has learned by building analytics platforms for clients and consulting with the best of the best in the mobile industry.
Calculating Your Customer Lifetime Value - Dawn of the Data Age Lecture SeriesLuciano Pesci, PhD
Not all customers are created equal. Finding the average customer lifetime value is a quick win for your organization, and you definitely have the data necessary to do it, but a closer inspection of your data will show that 1 in 5 of your customers is responsible for 80% of the total lifetime value. And that isn't even taking non-monetary CLV into consideration. To beat your competition for the best customers you need individual-level insights about the value of each customer.
This Lecture Will:
-TEACH YOU HOW TO USE YOUR DATA TO FIND AVERAGE CLV.
-EXPLAIN THE BEST PRACTICES WHEN DEALING WITH NON-MONETARY CLV.
-SHOW YOU HOW TO MOVE BEYOND AVERAGE CLV TO INDIVIDUALIZED CLV.
You can watch this lecture here: https://youtu.be/iCX-afWhmZ4
Reporting. As digital marketers, we know we have to pull reports and make sure goals are being met. It makes our clients happy, it makes our bosses happy. It’s easy to fall down the rabbit hole of metrics and analytics…before you know it, 2 hours have flown by and you don’t remember why you logged on in the first place.
We know its an essential function in the PPC world, but why do we spend so much time on reports when its such a time sink for us? And even more importantly, how can I turn the reports into action?
In the recording, Hanapin digital advertising experts plunge into the core of why we report and discuss best practices and personal lessons on how to turn your reporting into actionable items to increase success for your and your client’s accounts.
You’ll get expert-level PPC tips like:
*How to identify the important facts from report metrics and use it to increase performance
*Examples of ‘average’ reports
*How to turn changes in performance into successful account strategies
Start using your reporting more successfully and efficiently today!
"SaaS Metrics, how does to leverage the subscription economy?" by Patrick Cam...TheFamily
At TheFamily, we believe that anyone can become a great entrepreneur. Find more info here: http://www.thefamily.co/
- By Patrick Campbell, CEO at Price Intelligently (http://bit.ly/2iPRkKK)
- You can watch the full talk here here: (http://bit.ly/2iPMZan)
- Join us IRL next time: https://www.meetup.com/TheFamilyBerlin/
Voice to Text to Data to Insights : Speech Analytics solution overview
Unstructured Data Analytics
Contact Center Customer Experience Analytics
Key design principles of speech analytics
Driven by frequent tests, experiments or iterations, the lean startup seeks to gain insights by measuring user and market responses to its activities. Nevertheless, many startups struggle with effectively implementing the lean approach and we believe that a better understanding of business model analytics can change that for the better.
The purpose of this Best Practices session is to deconstruct the process of business model analytics to give entrepreneurs and practitioners a more concrete understanding of the analytical practices needed to drive the early stages of a new venture toward a validated business model. This session will take participants through practical and accessible methods for creating the right metrics, provide the context and use for each, and ultimately help to drive the venture’s key strategic decisions.
Analysis on Email Marketing Campaigns and Analytics to improve business decisions
You can find analysis and code to it here: https://pradeep.code.blog/2020/05/29/email-marketing-efficacy-and-business-decisions/
Speech Analytics: Increase collections while reducing compliance riskCallMiner Inc.
Debt collectors are challenged to maximize revenue collection while remaining compliant, and treating consumers fairly and with respect. Speech Analytics can help ensure agents are effective and compliant and that consumer data is protected.
Driving Value for Utilities using Speech AnalyticsPam Jeffries
Speech analytics can turn your call center recordings into insights that yield real business benefits. Built by our experts for a live webinar, these slides will share how speech analytics “as-a-service” capabilities can help your utility increase first-call resolution, lower cost to serve, and increase overall customer satisfaction.
The (Ultimate) Guide for Marketplace AnalyticsWilly Braun
We divided the guide in 2 parts: (1) marketplace dynamics, where we try to grasp the overall picture, (2) marketplace KPIs, where we make a snapshot of the different parts of the business and look at them overtime.
And as a super bonus, we’ve prepared an open-source dashboard (Google Spreadsheet) to structure your activity.
Chris J Snook- Founder Institute Denver mentor presentation on the rules of good revenue model design and the laws of revenue, compensation, and growth along.
When it comes to online advertising, it isn't about how much you spend, it's about how you spend it.
Should you be spending more on Facebook or Google?
What is the best budget for your industry?
When should you stop putting money behind a poor-performing campaign?
For these answers and more, join our live webinar with our in-house pay-per-click expert.
You'll learn:
- How to use 2018's results to set the best budget for your business in 2019
- What processes you can set up now to keep wasted spend in check all year long
- How to quickly determine which ad types are actually worth putting your budget behind
- What signs you should be looking for when managing your bids
Our first Leeds Online Seller Meetup held on 7th April in Leeds Beckett University was really successful. We had attendance of 20 online
businesses and a representative from local chamber of commerce. There was an interesting mix of businesses selling fancy clothes, books to kitchen doors.
When it comes to online advertising, it isn't about how much you spend, it's about how you spend it.
Should you be spending more on Facebook or Google? What is the best budget for your industry? When should you stop putting money behind a poor-performing campaign?
For these answers and more, join our live webinar with our in-house pay-per-click expert.
You'll learn:
- How to use 2018's results to set the best budget for your business in 2019
- What processes you can set up now to keep wasted spend in check all year long
- How to quickly determine which ad types are actually worth putting your budget behind
- What signs you should be looking for when managing your bids
Rob Jones, managing director of Peloton Partners, shares emerging pricing trends in the industry based on data from 70 advised firms across Australia, and strategies for advice practices to extract latent value out of their business.
Email marketing is one of the oldest digital marketing tactics, yet it continues to deliver a higher ROI than just about any other online strategy. But this is not your father's email marketing anymore. That's right: this strategy has matured, and if you haven't revisited how you create email content since the early 2000's, you're most likely missing out on the major ROI and benefits of email. This topic takes an in depth look into six key areas of email marketing and how each has evolved. It's time to update your old email marketing strategy and move it to 2016 and beyond.
The 8 Things Everyone Should Know About Startup FundingWilly Braun
Startup funding is not intuitive: you invest large amounts of money in companies that have proven very little, with a really high rate of failure.
At first glance, it is even total nonsense financially speaking: you put money in companies that have no profit AND don’t plan to pay dividends before *long* (hello Amazon) while not being liquid either (you can’t sell the stocks easily since they are not publicly listed).
So it is very normal that this topic raises questions. Our goal here is to share the underlying lessons and assumptions of VC when they look at a startup.
ROI for Optimal Lead Quality for B2B Demand GenAsad Haroon
How do your leads measure up? Knowing the answer to that question is key to getting the best results. Judging any lead source without using the appropriate metrics can be very counterproductive.
Watch This Free Webinar On-Demand: http://dg-r.co/2fuk0LO - Maximize Customer Lifetime Value In 2017 by Leveraging Your 2016 Wins
Learn why Customer Lifetime Value is a critical metric that can improve your ABM plan & shape your 2017 budget
You worked hard in 2016 to target and convert the accounts and prospects with the highest propensity to buy. Now you need to keep those new customers happy while continuing to expand those relationships. Join Matt Zelen, SVP of Customer Success at Act-On Software, and learn how you can maximize your customer lifetime value in 2017, including:
• Why customer lifetime value is a vital strategic metric for your business;
• How both customer lifetime value and customer acquisition can help determine marketing budget in 2017;
• Tips and tricks to creating a long-term, strategic approach to defining customer lifetime value; and
• How CLV positively impacts account-based marketing initiatives.
This presentation is a guide to creating great surveys. It was originally prepared for CoFoundersLab as a two-part webinar series. This content was also used in various presentations including at the annual AMA (American Marketing Association) Conference. And it's an incredibly useful guide that seeks to help demystify great survey creation along with how to run and manage a survey/feedback project.
The Secret to Successful Survey ProjectsBrent Chudoba
Better decision making fueled by data. A primer on how to run a successful survey project from hypothesis through survey design, analysis and implementation.
Modify Watches are super-dope, interchangeable watches. You can mix-and-match faces and straps to create the "Mod" that allows you to make your statement, whether (quiet) or LOUD.
1. How much would you pay for a click?
An introduction to lifetime value
Presented by: Brent Chudoba, SurveyMonkey
Lehigh University: Principles of Marketing – MKT 111
OCTOBER, 2014
2. Introduction
Brent Chudoba
● Senior Vice President, General Manager of SurveyMonkey Audience
● Joined @SurveyMonkey in 2009
● @bchudoba
● brentchudoba.com
● in/brentchudoba
3. Goals
• By the end of this session you will
- Be ready to start your career in marketing at a
powerful Internet company. Well maybe not yet, but
you’ll be familiar with some key jargon and the
fundamental concept of lifetime value
- Have a working framework for how to evaluate the
value of a customer and how it impacts marketing
decisions
3
5. Session notes
• This session is about how the value of a customer
connects to how marketers think about spending on
advertising
• We will use a real company example, but numbers are
based on Internet research on sites like Quora, Forbes
and Netflix Investor Relations
• Numbers are simplified to facilitate discussion and explain
concepts but may have inaccuracies due sources and
changes over time
5
6. Scope notes
• Customer Lifetime Value is a complex topic
- The focus in this presentation is on basic lifetime
revenue value of a monthly subscription service
customer
- A starting point for more information on Customer
Lifetime Value (CLV) can be found in this Wikipedia
Article
6
7. How many of you have access to a
Netflix paid subscription?
7
12. Let’s establish a reasonable value ceiling
• What is the total amount of money (one key
measure of value) that you will pay Netflix over
time?
- This is the concept of Lifetime Revenue (LTR)
• How do we figure out this metric?
12
13. Components of basic LTR
• Average monthly cost of a subscription
- Often referred to as AOV (average order value) or
ARPU (average revenue per user)
Multiplied by
• Average number of months customers subscribe
(aka: average lifetime)
Equals
• Average Lifetime Revenue of a subscriber
13
14. Average monthly cost of a subscription
• Typically a weighted average of the different subscription
prices and the % of customers who choose each package
• We’ll use $10 as a simple average for our example
14
15. Average months customers subscribe
• One simple method to calculate is the “half-life”
- If customers cancel or “churn” at a consistent rate, at the time where only
50% of a cohort of customers are still paying subscribers, this is the
average lifetime of a customer
Remaining Customers
15
100
80
60
40
20
0
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97
Customers
Month
17. What could be missing?
• Average monthly cost can be more complex, and may need to
incorporate
- Price changes and discounts
- Package shifting (moving from one subscription type to another)
- Upselling & cross-selling of other services
• Lifetime calculations can be more complex
- Many subscriptions don’t have a constant cancellation rate
• Cancellation rates can be much higher in early months and drop significantly
in later months, extending the lifetime
• Viral marketing benefits and word of mouth sharing increase
the value of each customer
17
20. Starting with Lifetime Revenue (LTR)
• If a business spends more than LTR ($180 in this
example) to acquire a new customer, it will go out of
business quickly
- Remember that $180 takes 18 months to collect
20
• Most businesses seek
- Long term profitability
- Have operating costs (e.g., employee salaries, rent)
- Have costs for providing services (e.g., servers, data
hosting, content licensing)
21. Marketing as a % of LTR
• For our example, let’s assume Netflix is willing to
spend 10% of its customer LTR ($180) on
marketing
• This would give it $180 X 10% = $18 to spend to
acquire a new customer
21
22. Click value
• If we assume Netflix can convert 10% of people who click
on paid search ads to paid customers
• It can afford to spend $1.80 per click ($1.80 / 10% = $18)
to meet it’s target of $18 in customer acquisition costs
22
24. Marketing strategy is a balancing act
• A company’s business objectives will have a major impact on
how is runs its marketing strategy, and how it answers
questions like:
- What % of our customer LTR are we willing to spend on acquiring
new customers? 10%, 50%, 150%?
- Where should we set our initial price point?
- Should we offer monthly or annual subscriptions, or both?
- Do we need to account for sales costs (e.g., commissions)?
- How important is early traction for a new product or geography?
24
25. What can influence marketing strategy?
25
May optimize for:
• Conversion / Market Share
• Cash
• LTV (long term revenue)
• Profit
• Supply/Inventory mix
Business scenario:
• Bootstrapped startup
• VC backed startup
• Established business
• Unknown LTR
• Physical product retailer
29. Really complex
29
Does anyone have an iPhone?
How would Apple estimate your LTR?
How valuable did you become to Apple when you bought an iPhone?
After your iPhone purchase, you became:
• Much more likely to spend money on iTunes & the App Store
• Much more likely to buy a Mac, which makes you
- Much more likely to spend more money on iTunes
- Much more likely to upgrade to the next iPhone
• More likely to buy an iPad
• More likely to buy an Apple Watch
• Much more likely to upgrade to new versions of all these products
• More likely to tell your family and friends to buy Apple products…
It’s safe to say that $199 is only the beginning of a new buyer’s LTR
32. What about the acronyms…
I overhear conversations like this every day…
Marketing: “This test failed, the LTV impact was too negative despite a
higher AOV.“
Exec: “But first period churn may be better given the source, and with the
higher AOV and ARPU, the LTR is going to look better.”
Marketing: “The main AOV impact was related to higher conversion because
of the source mix, but that also means CAC is higher for these users so LTV
will be lower.”
Exec: “Ah, gotcha. Makes total sense, let’s keep testing.”
32
33. But they are important to understand
• There are about a dozen inputs that
go into many of the spend
calculations for marketers
• Most businesses rely heavily on core
metrics that allow them to gauge
performance
• Advice: when you hear a metric you
don’t understand, raise your hand,
figure out what it means…
33
36. A marketer might see…
36
They are
really trying
to drive to
this
package w/
a badge
and a
different
color CTA
Using images to show the major
differences, which is device
portability, extremely helpful cue
This is a freemium
product, if I downgrade I
revert to free
38. A marketer might see… Packages 1 and 3 may be
38
Avg.
price/month is
likely in the
~$10 range,
Avg. lifetime in
the 18 month
range, so LTR
may be around
$180…
used as bookends, with the
price 33% higher making
“Camera” look like a great deal