- Explain the customer lifetime value (CLV) concept. Thinking about a specific firm, how could it use the concept of CLV to increase the overall profitability of its customer base?
The customer lifetime value is “the net present value of a future stream of net revenue from an identified customer.” Mint.com is a start-up that is quickly growing and has developed a business proposition that makes a lot of sense. They have, I believe, 100,000 subscribers and this website generates revenue through referrals. I believe this company should keep developing value-added features to its website in order to retain customers because the company is entirely dependent on them to make money, so I think that if they really take this concept of CLV to action they can generate strategy to increase their customers lifetime value.
- How is testing different from marketing research?
Testing is used to find out what works for a target market, and marketing research is used to understand the target market.
- Why and how does testing offer opportunities to Internet marketers?
It allows companies to test marketing campaigns before spending lots of money. Internet Marketers need to validate that their assumptions are statistically correct and that before they go into something big they can test it to see if it really will bring the desired results.
- Explain the related concepts of data warehousing and data mining.
Data warehousing has to do with the storing of data while data mining has to do with the analyzing of data.
Notes
Target Customer > Value proposition > capabilities
has needs matches
value for enable
Ipod – all your music on the go
Functions of Business Models
- Articulate value proposition
- Identify target market segment
- Define structure of value chain
- Define cost structure and profit potential
- Explain position in value network
- Set forth competitive strategy
Ipod bought the rights to the flash memories.
The four I’s of internet marketing
Interactive
Informative
Immediate
Involving