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HS285: Marketing Management Class Ten June 27, 2013

HS285: Marketing Management Class Ten June 27, 2013. Beth Goldstein. Today’s Class. Chapters 22 – 29 Customer LTV & Equity Netflix Case Guest Stuart Paap. Thanks to the following teams. Volunteers to present on Monday Emerging Leaders Huddle Care Music Awesomeness Vshare

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HS285: Marketing Management Class Ten June 27, 2013

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  1. HS285: Marketing Management Class Ten June 27, 2013 Beth Goldstein
  2. Today’s Class Chapters 22 – 29 Customer LTV & Equity Netflix Case Guest Stuart Paap
  3. Thanks to the following teams Volunteers to present on Monday Emerging Leaders Huddle Care Music Awesomeness Vshare Meet me in class by 8:45 Mon so I can load PPT All others – please load PPT to Latte before midnight Monday and upload written plan by 9 am Tuesday morning
  4. Failure Rate of NPOs Alas, I am not aware of any data on the question you pose. However, based on anecdotal evidence of the never ending growth of the sector even during the Great Recession, I think of a tweak of the famous words of General MacArthur, "Old charities never die, they just malinger on indefinitely"! Ken Berger, President. Charity Navigator
  5. Failure Rate of NPOs As you know, given the complexity involved in determining these sorts of stats for small businesses, this is a big, complex question.  You can find stats around revocations, failure to thrive, but a huge challenge is trying to capture and define the entire “nonprofit market.”  Timothy Regele, The Boston Foundation
  6. When Customer Equity Matters Short term marketing tactics can negatively impact lifetime value EQUITY Measures Customer acquisition Customer retention Cross/upselling opportunities
  7. Wachovia
  8. Lessons Learned Not all advertising media is the same Customer behavior varies by region Customer relationships should be the focus of valuation measures Interactive media is important but does not displace traditional THIS IS HARD!!!!!
  9. Lifetime Value
  10. Lifetime Value
  11. Lifetime Value
  12. Lifetime Value
  13. Customer Lifetime Value Total Revenue Individual Generates + Revenue their Referred Business generates - Acquisition & Maintenance Costs
  14. LTV for Non Profits Means REDEFINING Your Customer Total Revenue Donor Provides + Revenue their Donation/Support generates - Acquisition & Maintenance Costs
  15. Implications to your Success Which tools you use to acquire which customers or donors How much you spend Which customers/donors to fire/avoid Measurement tools and skills required
  16. Customer Lifetime Value 14.1 H: Customer/Donor Lifetime Value _________________________????? I: Investment/Amount required to attract and retain customer/donor (Marketing + Customer service cost) _________________________???? How Often Is I > H?
  17. Customer Lifetime Value 14.1 What can you do to increase the individual value of a donor or customer? Which customers ordonors will you boot?
  18. Customer Lifetime Value 14.1 A:Amount customer spends or donates H: Customer Lifetime Value What does the GAP between A andH mean? Where is the value generated????
  19. How Many Use Netflix?
  20. Brand Perception/Value: DVD vs Streaming
  21. Netflix: Who are they?
  22. Netflix Theyevolved with the needs of theiraudience. Whatcausedthem to make a change at everyshift?
  23. Netflix – Evolution At launch – content to earlyadopters of DVD players Web portal for movielovers THEN…………..
  24. Netflix – Evolution DVD Rentalbymail – alternative to traditional video rentalstores (Blockbuster) THEN…………..
  25. Netflix – Evolution Loweredprice to be ’allyoucanwatch’ serviceprovider THEN…………..
  26. Netflix – Evolution Developedproprietaryrecommendationsystem THEN…………..
  27. Netflix – Evolution Rapidexpansion of regionaldistribution center providingovernightservice via US Postal Service THEN…………..
  28. Netflix – Evolution Became a distributionchannel for less-known and Indiefilms; launched Red Envelope Entertainment THEN…………..
  29. Netflix – Evolution Made iteasier for customers to leave and return THEN…………..
  30. Netflix – Evolution Video on DemandOptions: 2007 License recommendationsystem to cableproviders (partner with the enemy) Streamonline video for free Become a stand-aloneonline video business Separateprofitcenters for video and online
  31. Blockbuster “Online rental services are serving a niche market” Sept 2010 – filed for bankruptcy (>25K employees at the time) Failure to adapt and evolve
  32. Split in Two – Raising prices ‘11
  33. 60% Price Hike Reaction >12,000 people left comments on Netflix's blog post Social media flooded with complaints Every major media outlet covered the story That’s a $6 price increase – REALLY!!!
  34. Blockbuster seizes the opportunity Offered Netflix customers a free 30- day trial and a discounted subscription plan. At Blockbuster.com"Looking to make the switch to Blockbuster? Tell Netflix why," option to post publicly #HelloBlockbuster”
  35. Vudu (Walmart’s Streaming Svc)
  36. Netflix Price Increase Debacle – 9/11
  37. Final Thought – by the Numbers Streaming: 36.3 million (3/13) (up 3 million in Qtr 1 ‘13 alone) DVD: 8 million (down 241,000) Hulu: 4 million paid as of 4/13 (Disney and News Corp. own them) Amazon Prime:10 million as of 3/13 Redbox: 36K locations/43K Kiosks
  38. Marketing Director Interviews Lessons Learned
  39. Next Class Assignment: July 1 We will discuss your: Marketing Budget Managing Overhead costs for non-profits Fun with Marketing Activity: The Good, the Bad, the UGLY!! Presentations – 4 businesses
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