Customer Lifetime Value is a key marketing metric that many digital marketing organizations use to drive competitive marketing strategy. Zappos.com is a well-known online shoe company. Zappos.com sells all types of shoes, from dress, to athletic to casual. Let’s say that Zappos.com is looking to expand its sandals category. Sandal vendors are interested in doing business with Zappos.com, but are asking Zappos.comwhat their customer lifetime value is for a Zappos.comcustomer.
Assuming the average customer makes 1 purchase from Zappos.com a month with an average purchase of $125, and the average length a loyal customer of Zappos.com is 10 years, what would be the Customer Lifetime Value and how can Zappos.com educate the sandal vendors to help them understand this metric further? How would you go about putting together this calculation? Please show all your work in your calculation steps. Also, describe the benefit of knowing the customer lifetime value for this scenario.
Topic 2: Segmentation
Customer Segmentation is a key analytics effort for any marketing firm to better understand how to group their customers in various segments to establish targeted marketing efforts. Think of your company, or a company you are interested in working in and the types of products, services or business it is in and how you would approach developing a minimum of 2 customer segments. What data points would you use and why? What are at least three key benefits of building those segments and building them into your company’s digital marketing strategy? As you describe each of those benefits, identify what the key marketing metrics are that measure the success of segmentation strategies. How do those key marketing metrics for segmentation define success?
Topic 3:A/B Testing & Marketing Campaigns
Using the 2 segments you identified in the second essay, think of an A/B Test in a marketing campaign that you could develop to understand how to market to each of these segments. What marketing campaign strategies would you test? What type of imagery, content, copy and other marketing campaign would be in version A vs version B of the test? What are at least 2 KPI’s or key marketing metrics that must be evaluated when co