Week 11: Customer Lifetime Value

I hope this post makes it to blogger.  The great firewall of China will be preventing me from accessing blogger for the next week, so I am posting via the nifty blogger email feature.  

CLV

The customer lifetime value concept seems pretty intuitive but I hadn't thought of it until learning about it this week.  I read through an article that I found through Reddit Business about a blogger who is applying the CLV thinking around his newsletter reading. It is interesting to hear his take on the lifetime value of his readers.  

Learning Journal Questions

1. Does your company explicitly know the value of its customers?
1. Looking at my wife's uVinyl business, the value of our customers so far is just their initial purchase (little repeat business so far).
2. If not could your company utilize CLV?
1. I think we could utilize CLV, especially with regard to the marketing costs of different aspects.  I am gaining a better understanding of google analytics and can see where traffic is coming from to see where the costs are.  As we gain more repeat customers, we could drill down to find out which customers came from which marketing activity (blog, pinterest, facebook, ads) and how many repeat purchases per year they make and what the drop off rate is.   So far our costs are mostly time and energy, but we plan to look at using google adwords as well.  I haven't found a way to see the direct impact of the $0.50 per click though. 
3. What are some of the practical issues of implementing the use of CLV in a firm?
1. It could be difficult to know the precise numbers (retention rate, the acquisition costs for specific customer/group).  
4.  What are the major issues in the Rosewood Case?
1. The major issues in this case of whether or not (and how) to strengthen the Rosewood brand are around what would happen to individual brands if the Rosewood brand was pushed.   The unique properties' brands may be cheapened if Rosewood stamps their name on each one.  It may look like it was bought out or under new management or the Hotel is somehow different.   They expect some increase in multi property stays (5% boost, I think) so there seems to be some money in this. 
5. What recommendations do you have for the management of Rosewood.
1. I didn't run any numbers, but it seems like it would be overall more beneficial to have a unified front by adding the Rosewood brand to each of its hotels.  Although it may take some time to reap the benefits as customers become aware of the brand and what it stands for, in the long run it seems like a good choice.  From a quick look at their website and their properties, it appears that is the path they went down.  
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6. Which Rosewood property would you like to visit?
1. I'm sure any of them would be great.  I'd like to go to the Jumby Bay one...looks like a nice island and maybe there would be good diving!