What is most 'important part of CRM? Certainly the return on investment: If you gain, 'cause it? I mentioned it in the first post of this blog, come back by showing the differences between ROI, Profitability and LTV.
- ROI - The ROI measure the results of marketing campaigns. Investment X, Y, profit, ROI = (Y - X) / X. ROI and 'easy to measure, but in the CRM can' be misleading. Indeed activity 'customer acquisition will have' negative ROI easily, but then customers can be profitable in the medium term.
- Profitability - typically used by banks, the profit that a customer brings in a period of time (eg year) compared to a "portfolio of products" defined. Compared to ROI, it helps more 'to think in terms of CRM, bringing the focus on the customer. The problem 'which measures the performance only "static" of the client, while the CRM aims to increase customer value over time.
- LTV - To measure the increase in customer value over time, you have to use the Lifetime Value (LTV), the true indicator of the ROI of a CRM project. But it 's also tool to define the CRM strategy, simulating the results before you start. It 's a calculation more' complex, but you can 'do with Excel: try to calculate the Lifetime Value of your customers, with our tables LTV.
REFERENCE
ROI, Profitability and Lifetime Value
CRM Strategy - The first blog dedicated to the CRM strategy, curated by Marco De Veglia. FOR YOU FREE report on Best CRM Website: http://www.crmformarketers.com/ 
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