Customer Value

A hat tip to Ed Healy for pointing to this blog post by Avinash Kaushik. He sets forth a process for calculating the lifetime value of a customer, and points out that this is a better way to look at customer acquisition costs. It's especially important to note for publishers who are producing regular new products, particularly if their previous buyers are a likely customer for their new products.

If you're creating games with a setting where you intend to provide further products, then dealing with a customer over a long period of time is something you need to factor into your marketing decisions. If you would like to sell other products to customers, you need to worry about lifetime value. Generally it's going to be far easier, and more cost-effective, for you to sell multiple products to one customer than to acquire new customers for every new product.

Another way to look at this is to try and maximize the value to you of each customer. You don't want to do this by browbeating them, but by making their experience with you a positive one. Every aspect of the customer experience should be oriented towards this goal. Make paying for your product easy; make sure the product provides a terrific value for the money; follow up to make sure customers are satisfied.