Higher Customer Values Accrue to Next-​Generation Marketers

Marketers always want to know the lifetime value of customers they acquire. These calculations vary according to which channel a marketer uses to attract customers. With so many new channels available in the digital world as of late, one research firm, RJMetrics, has provided its take on what the customer value numbers look like.

In its Summer 2012 Benchmark report, RJMetrics looks at the new online formats and compares consumer spending there to traditional online retailing. Right now, flash sale vendors head the list with a Lifetime Value Growth of 385%. In this study, analysts measure the Lifetime Value Growth by measuring the amount of spending a customer does at a specific vendor in the course of a year against what was spent in the first month. For marketers offering group buying and daily deals, the Lifetime Value Growth is also ‘remarkable’, coming in at 150% and 143%, respectively. The ability of top performers is so strong, they can count on consumers to spend 600% more in the first year than they spend on their first purchase. By comparison, other online retailers can expect a 94% Lifetime Value Growth.

These ‘next generation’ marketers – the term for vendors who specialize in daily deals, etc., can count on the typical customer to make another purchase around the 50 day point. For traditional online retailers, that number is more like 89 days.

But all is not lost for traditional online retailers. When customers visit their sites, they spend an average of $105. For the next-​generation retailers, each order averages:

  • Daily deal $61
  • Flash sales $61
  • Group buying $82

Marketers should keep in mind that the data points provided by RJMetrics do not take costs into account. However, these sales numbers provide great information about which channels are driving consumers sales and therefore, which channels also merit marketing focus.

[Source: Summer 2012 Benchmark Report. RJMetrics​.com. 2012. 10 July 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.