A Thoughtful Response to 'Really? Lifetime Value is a Distant No. 4?'
[Editor’s note: Derek Harding, founder and CEO of Innovix, sent a thoughtful response to last week’s piece in which I questioned why email marketers are apparently focused on so-called engagement metrics such as opens and clicks and not on what I consider to be one of direct marketing’s most important metrics, customer lifetime value.
The article was prompted by a survey from ExactTarget where respondents rated opens and clicks as their No. 2 success metrics just behind conversions, and rated lifetime value at No. 4.
I claimed the survey results were evidence email marketers had bought into the industry's "engagement" propaganda.
Harding's response illustrates how easy it is for guys like me to Monday-morning quarterback:]
I suspect the reason many marketers are not using LTV is not because they don't think it's important or because they've been duped into believing in engagement. Rather I think that it is in fourth spot due to the challenges it presents to marketers.
The first challenge is that it's not a helpful campaign metric. Many marketers are measured on and thus focused on the short-term, on individual campaigns. This results in using metrics that are relevant to individual campaigns, such as opens, clicks and conversions. The second is that LTV raises the attribution problem. LTV is impacted by all advertising and marketing making accurate attribution essential but we all know attribution is very difficult.
So I think maybe email marketers are using inferior metrics over superior ones for practical reasons rather than because they've been duped by propaganda.
[Fair enough. I stand corrected.]