CFOs like profitability numbers; customer experience leaders speak in soft benefits. The gap is why so many CX proposals never get funded. Return on Customer Investment is the business approach that bridges that gap — turning satisfaction, retention and education investments into hard ROI numbers a CFO can take to the board.
Charity donations, magazine subscriptions, event re-attendance, mail-order purchases — non-contract, discrete-transaction relationships are everywhere, and the standard CLV formula doesn't fit them well. Here's the Fader-Hardie model for that quadrant translated into actionable steps, with the data you need and how to use the resulting customer-value forecasts.
Fader and Hardie's CLV models are well known in marketing academia and largely ignored in marketing practice — partly because the source papers are dense, partly because nobody distils the actionable steps. Here they are for retail and other non-contract continuous-purchase customer bases — what data you need, the assumptions to check, and how to use the results.
Untargeted cross-sell trains customers to ignore you. The next-logical-product approach picks the offer the customer is most likely to want next and times it well — and the conversion rate difference is dramatic. Here are four ways to determine the next logical product, from current-holdings analysis to lifecycle, life-stage and activity-based triggers.