SigmaWay Blog

After acquiring a customer, the goal of a company is consumer retention through various techniques, namely customer value maximization which would maximize the revenue for the company. Their main aim should be to increase the length of time period they remain loyal to business, frequency of transactions and monetary value of transactions. Maximum value is thus the product of all three. Main characteristics of customer value maximization are customer segmentation, predicting consumer behavior instead of just looking historical data, looking at customer lifetime value and dynamic segmentation. The marketer should know what actions to take on what customers at the right time. Read more at: http://www.optimove.com/blog/maximize-customer-value-smart-way 

Jacob Baadsgaard (Founder & CEO of Disruptive Advertising) shows how to determine and track the contribution margin in order to make the marketing initiatives profitable. Basically contribution margin is the difference between the amount of money made from the sale and the variable cost associated with that sale. The easiest way to predict the success of the marketing efforts is by following the rule of thumb.

§  1X contribution margin:- making extreme loses

§  2X contribution margin:- making losses

§  3X contribution margin:- breaking even

§  4X contribution margin:-  starts making profit

§  5X contribution margin:- accelerates the progress of the company

So, higher the contribution margin higher is the profit made by the company. Therefore, it is of utmost importance to get rid of non-profitable aspects of marketing. To know the contribution margin of a company it is essential to know the customer lifetime value, marketing sales and marketing spend. Read more at: http://marketingland.com/contribution-margin-tell-marketing-makes-cents-180717

Predictive analytics help you how to make money. Angela Hausman, PhD (marketing professor at Howard University) writes in her article about some possibilities to improve bottom line by using predictive analytics: 1. Recommendation algorithms
2.Manage the customer journey
3.Segmentation based on CLV (customer lifetime value) or other variables
4.Optimize deployment of company resources
5.Hire the best employees for a job
6.Detect fraud. Using predictive analytics, firms segment their customers on more influential variables. Predictive analytics can help to optimize deployment of resources. For more read: http://www.business2community.com/business-intelligence/want-buy-using-predictive-analytics-01543154#eTFpvvsFFDwam4MG.97