Charity uses lifetime value modelling to assess returns from new eCRM system

A charity is considering implementing a new e-mail marketing system to increase donations from its donors. The charity's main role is as a relief agency which aims to reduce poverty through providing aid, particularly to the regions that need it most. Currently, its only e-mail activity is a monthly e-newsletter received by its 200,000 subscribers which features its current campaigns and appeals. It hopes to increase donations by using a more targeted approach to increase donations based on previous customer behaviour. The e-mail system will integrate with the donor database which contains information on customer profiles and previous donations.

The company is considering three solutions which will cost between £50,000 and £100,000 in the first year. In the charity, all such investments are assessed using lifetime value modelling.

Table 6.3 is a lifetime value model showing customer value derived from using the current system and marketing activities.

Table 6.3 Lifetime value model for customer base for current system
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