Make Friends With Your CPA
This information also can help you make other customers more valuable. "The most hidden cost in the customer equation is maintenance," says Rickson. "We often look at the cost to acquire a customer and the revenue they bring in, but how often do we look at the cost to maintain that relationship?"
Activity-based costing also allows marketers to find ways to increase the profitability of lesser performing customers.
Says Rickson: "Milking only the cash cow and not saving for a rainy day is short sighted."
By looking at the financial data, you can find where boosts in revenue come in, says Rickson. Unfortunately, this information still resides within the accounting department.
Integrated Marketing and Accounting Databases Enable Cross-selling
Information typically is spread throughout an organization, so often you can look only at parts of a whole. To get a true and accurate view of your customers, all databases must be integrated. Think of the number of departments in your company. Then, think of the number of databases that exist and how many pieces of customer information are segregated in separate databases. Each are individual stores of information, and department managers base decisions on only that information.
By using an integrated database, all departments can have access to all information. Accounting still sees its data in a relevant format, while marketing can view its data in a format that makes sense to it. Accounting can flag all profitable customers in the joint system, and marketing can use those records for its campaigns.
Once you have the ability to determine the lifetime value of your customers, says Rickson, you then can mine the data and do predictive modeling to find more "like" customers.