Creating models to quantify Customer Lifetime Value (CLTV)
Familiarize yourself with the spreadsheets that Jeffrey Steinberg has provided as sample models for quantifying different aspects of CLTV in MotherNature Files.xls. Look at the sheet called “Static Model” to understand how all aspects of marketing – Price (necessary spending, average $ spent), distribution (conversion rate, retention rate), communication (cost per click) and product (gross margin) become integrated into CLTV models. The shaded cells are inputs that you can manipulate to see how each of these variables affect key marketing metrics. We have included hypothetical inputs (not necessarily reflective of MotherNature.com’s business), but we strongly encourage you to challenge these assumptions.