by Jason Brandt (@jasondmg3)
There are few core tenants as sacred in the world of direct marketing as Customer Lifetime Value (LTV). In fact, almost every major direct response, continuity or loyalty program is based on core LTV philosophies that have been around since before the Don Draper era.
LTV is defined as the total sales revenue received, actual or estimated, from an average customer during their relationship with the company. In fact, companies that decide to do business with a customer (do business = make marketing investment) will model exactly how much they are willing spend on a customer or prospect over a period of time. That investment will increase or decrease based upon the frequency and size of the transactions the customer makes. Although it builds on past customer history, LTV is all about projecting future activity. It is based, primarily, on the customer’s expected retention and spending rate, plus other factors that determine investment ranges.
Packaged goods, travel, credit card, publishing are industries that have been using LTV for years. A new industry getting into the LTV game is Reality Television. There was a time where every red-blooded, god-fearing American was more or less guaranteed their fifteen minutes. But thanks to the creative minds that produce unscripted programming designed to place non-actors in humorous, embarrassing or dramatic situations, Americans can be cast in reality programming from the day they are born to the day they die. In fact, Reality TV has become the ultimate entertainment genre that uses cradle to grave LTV principles to gather audiences and participants alike.
OK. Lesson over. Let’s have some fun and play this out:
Your realty LTV lifecycle begins pre-birth. In the womb you’re cast, unknowingly of course, in I Didn’t Know I Was Pregnant. Admittedly, not the best start to your reality TV career, (it sucks being mistaken as heartburn for the last 9 months) but hey, we all have to start somewhere. What’s worse is that your parents are very young. They are in high school and as a result, you’re second reality TV show starring role is 16 and Pregnant where your mom-to-be “navigates the bumpy terrain of adolescence, growing pains, rebellion, and coming of age; all while dealing with being pregnant”. Poetry.
You are born and as the cameras are there to capture your cord being cut, you start your 3rd reality show Baby First Day. Like The Truman Show, every moment of your first few months on earth are expertly documented. But wait, what is all the crying around and who are all these other babies? You have a brother? A sister? Yes, in fact, you are one of eight. Snap – your new show is Jon and Kate Plus Eight. You have to share the limelight with your seven siblings, but never fear, it’s only a matter of time before your teenage parents can’t handle the responsibilities (not to mention the bills) and seek help. Your reality role #5 is Baby Borrowers where you and your siblings go live with “participating couples that are entrusted with caring for a babies THAT ARE NOT THEIR OWN”. Caesar Augustus could not have been so fiendishly clever.
As luck would have it, your “new adoptive parents” live in Mississippi and are baby beauty experts – so they enlist you in the child beauty pageant circuit. You star in Toddlers and Tiaras and move over to Little Miss Perfect when you get a little older. Alas, you never won the grand prize – fortunately your tutor is quite enthusiastic about your academic aptitude, despite your lack of conventional schooling. You are added to the cast of Are You Smarter Than a 5th Grader where you show the world you are smarter than Danny Bonaduce.
AYSTAFG goes well enough – until you hit sixth grade and are asked to pack up. Your father tries to extend your contract, but he gets angry and he is thrown out of the producer’s office. A neighboring produce – impressed with your father’s violent streak – casts both of you on My Dad is Better Than Your Dad. Your Dad’s new found celebrity drives him to excess. He finds drinking, drugs and eats way too many Grand Slam breakfasts. He is absent, never home and hangs out with Michael Lohan. Social services come knocking and it is clear your family needs a little supervision – hello Nanny 911.
Nanny does a nice job raising you while dad is upstate doing 3-5. Managing yourself, you sign a deal to tell your story on Confessions of a Teen Idol. You are simultaneously cast in High School Reunion. America watches the drama unfold as your childhood friends arrange your Intervention in the middle of the old cafeteria.
It’s time to take a break from Reality TV fame and go to college. Tuition is not an issue (your parents did a good job investing your residuals), but your grades suck and you must settle for a local technical college. Graduating with honors you catch the attention of Donald Trump who offers you a spot on The Apprentice – which you win. You stay with Trump for years and create an impressive nest egg. But you are lonely, and since Ivanka is now married, you call The Millionaire Matchmaker – which is a waste of time, so you become The Bachelor where you meet the girl of your dreams and propose.
You both put on a few over the following year, so with your wedding quickly approaching, you are cast in Shedding for the Wedding. The strict diet makes your fiancé ornery so she joins Bridezillas. After the wedding you move to Atlanta and are cast on The Real Housewives but things get boring so you join season six of Wife Swap. In love with her new partner, your wife files for divorce and manages to take all your money. The producers of Pawn Kings sign you and watch as you liquidate whatever assets you have left.
Depressed and broke, you turn to drugs and eventually join Celebrity Rehab. You clean yourself up, but gain 120 lbs in the process of drying out. Hello Biggest Loser.
After an astonishing turn around, you are lean, mean and ready to get back to basics – find yourself, get religion. You escape into the outback and join Man vs. Wild. Six weeks into your mission, you are attacked by a pack of rabid wildebeest and die a violent, bloody death. Luckily the Ghost Hunters are hired to make contact and wish you good luck in the afterlife.
Your life may be over, but your LTV will live on. Thousands of people inspired by your story will find their own path through the myriad of reality programming out there. And as more reality shows debut, the more opportunity producers have to lock you in and engage you at every stage of your life. Publishing, credit cards, reality TV. If Don Draper was real, he would be proud – of course, he would also be on Celebrity Rehab.