Businesses need to what it is costing them to acquire the next new profitable customer.   They also need to monitor customer "churn" and the factors driving it.   This tells them the number of customers lost who will need to be replaced by new profitable customers.

But most of all, they need to understand what a new customer is worth over their lifetime of spending with the business.   And that analysis needs to focus on the household as the spending unit.

• Unless you know what a customer is worth to the business, you cannot evaluate how much you should be willing to spend to acquire others like them as new customers.

• Your goal is to keep them loyal.   Loyalty means not simply that they spend with you each year, but that they prefer to use you "all things being equal" so that you get their business whenever they have a need for what you sell.

  But you also want to sell them more; and to do that via cross selling and other strategies aimed at getting customers including lost customers back to the store.

The Internet is a tool you can use for one-on-one personalized communications with your key customers...assuming you know who they are.   The Internet is also a tool you can use to maximize revenue per customer via cross selling. Last year they bought a bike so this year they need a tune-up.   Their car is coming off lease, so maybe we need to show them the new offerings before they visit someone else.

• But cross selling implies that you have a model of what consumers need and when they need it.   Your customer files can track this alerting you that a customer has in the past made a certain purchase which makes him or her a candidate for a follow-on or related purchase.

• If they were great customers in the past but have stopped spending, your files can be "mined" to produce that list of key lost customers so you can re-connect.   If you want to find customers who tend to respond to sale mailings, your customer files can produce that list.

• The Internet provides a way to amplify communications, to personalize them, and to elicit input from consumers and keep your store open to them 24 hours a day 7 days a week.

Cwi Associates relationship marketing programs can help you make the most of your customer files and the Internet.   We show you how to use your web site to Internet to build files useful in targeting promotions.   Data collection opportunities include contests, "warranty registration," and VIP or Card programs using the Internet to collect data on individual customer households needed by you and your marketing partners.   The information supplements tracking data you collect at your store POS and by other means.