Lifetime Value Calculator

The first step anyone would ever do before creating an advertisement, is understand the lifetime or annual value of the customer they are targeting. From what I have read and researched, the floral industry has traditionally looked at a 3 year lifetime of a customer.

Use this electronic worksheet to first identify the value of your customer. In this worksheet you will be able to insert your average order based on your market and calculate a value based on your figures. There is no right or wrong answer here. Simply insert your figures in the fields and the worksheet will calculate the results over a 1 and 3 year period.

Next, continue to the advertising portion. This can be one of two campaigns, direct mail or insert. By identifying the parameters of distribution you will also calculate the cost of your ad.

When you analyze your results, you will have a clear understanding of the successfulness of your campaign. Now you have something to measure the levels of success for your effort. It is most important to track your callers and customers placing orders. A good POS and phone system will be worth the investment to get you true accurate figures.

Worksheet

To understand the value of marketing and engaging the customer, you must first understand the lifetime value of a customer.

Avg. Order	Yearly Avg. based on 4 buys per year	Lifetime Avg. assuming 3 years of business	Extended Lifetime Avg. for 100 customers
$

Advertising

A typical "shotgun" print ad costs about $7,000 for a print of 50,000 brochures inserted in your local newspaper.

Product	Number Ordered	Print Cost	Total
Brochures	,000
Inserts	,000
Campaign Total Cost

Results

Orders Received	% of return	Campaign Sales	Lifetime Sales 4 buys per year for 3 years