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According to the text a lifetime value analysis is “a data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers”. I decided to conduct a lifetime value analysis with a product that is near and dear to my heart (unfortunately). I calculated the amount of money spent on soda. Using the price for a 24 pack to determine the amount for a can of pop I have drank 14,235 cans over the last 13 years with an average of 3 cans per day. I figured I would begin when I was 10. A case of pop today is about $6 and based on that I have spent $3,558.75 in 13 years. I determined that soda has risen 5.2% every year since 1995.
Marketing has changed drastically over the years and there are always new ways of reaching your customers. Chapter 19 explains the approach of customer relationship management (CRM). This concept is important because the power has shifted from the producers and retailers to the customers. Years ago there were only a few companies to choose from and what ever they sold is what you bought. Not any more. Companies have to know what people want to stay profitable. There are six steps in the CRM cycle and the first is to identify customer relationships. This is gathering information about who your customers are, where they are and what they are buying. Second is to understand interactions with current customers. It is important to keep loyal customers as well as acquire new ones. Third is to capture relevant customer data on interactions. This is more information gathering to further understand what your customers are doing. For example a sales pers ...