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BizReport : Advertising : October 15, 2021

Report finds lifetime value stats lacking

Too many executives may be ignoring the lifetime value of their customers. That is a key takeaway from new data out from The CMO Council; researchers with the report found that 1 in 5 CMOs 'almost never' take this measure.

by Kristina Knight

In a pandemic year, marketing spends increased just over 5%, and over the next year as the world continues to come out of the COVID-19 pandemic, marketing spends are expected to increase by at least 13%. With that increase in spending, many executives are looking at marketing efforts to have stronger and immediate impacts - like spikes in revenue and higher engagement levels.

While those metrics are important, longer-term goals should not be ignored. According to The CMO Council's report Lifetime Customer Value isn't the only metric being ignored by many marketing executives. Researchers found that about one-third (35%) of CMOs don't measure brand equity and 29% aren't measuring things like brand personality/affinity, and nearly 22% aren't measuring brand differentiation or customers' willingness to pay premiums.

Instead, many are focused on more qualitative measurements like customer engagement, digital performance, and revenue numbers. According to researchers this is likely because CEOs and CFOs are demanding more short-term insights into brand performance.

"Most marketers report they are able to show the short-term impact of marketing spend using quantitative tools, while the majority report that showing the long-term impact remains more of a qualitative assessment," write the report authors. "[Sales] revenue and digital performance are the most consistently tracked marketing outcomes. Metrics such as brand equity value and customer lifetime value, on the other hand, are rarely tracked."

The metrics being tracked the most have a more immediate impact on company revenue. Most (78%) say 'always and consistently' measure sales and revenue, 58% regularly look at online and mobile performance, and 46% measure lead generation efforts.

More data from the report can be found here.

Tags: advertising, advertising measurement, CMO Survey, customer value measurement, ecommerce, lifetime value advertising, The CMO Council

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