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.