Understanding Net Present Value vs. Lifetime Value

Reading a LinkedIn article I came across the term Net Present Value (NPV). Wikipedia describes NPV as “the present value of money today compared to the present value of money in future, taking inflation and returns into account.” It’s However, I found the writer, Sallie Krawcheck’s, personal explanation more thought provoking: “the willingness to forgo earnings today, to invest smartly for more earnings tomorrow.”

Instead of applying to finances, economics and accounting, I started to think how NPV can be applied to marketing and customer relationship building. As marketers, we’ve been programmed to calculate something similar called a Customer’s Lifetime Value (LTV), the predicted net profit for the entire future relationship of the customer…but what about a prospect’s Net Present Value? Are they even worth acquiring? In the years to come, will they be worth more or less than they are right now?

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Understanding Net Present Value vs. Lifetime Value

Net Present Value

Reading a LinkedIn article I came across the term Net Present Value (NPV).  Wikipedia describes NPV as “the present value of money today compared to the present value of money in future, taking inflation and returns into account.” It’s However, I found the writer, Sallie Krawcheck’s, personal explanation more thought provoking: “the willingness to forgo earnings today, to invest smartly for more earnings tomorrow.”

Read more


To Learn Something Today, Read on now!

By Julie Determann, Account Supervisor

Our TWO Sense: To Learn Something Today, Read on now!

Every communication whether it’s online, email, direct mail, print or broadcast should have a clear purpose in mind. This single-minded focus in Marketing 101 terms is referred to as the “Call to Action”. It is NOT a hidden agenda, but rather a strong persuasive instructional directive that is pivotal to your communication. It should stand out from the rest of the message and highlight precisely what the marketer wants an attentive, willing recipient to do.Read more


Does Word Choice Really Matter?

Written by Julie Determann, Account Supervisor

Yes, it definitely matters. As marketers, we spend countless minutes writing and rewriting sentences until they say everything we need them to say. And by everything…I mean EVERYTHING! However, the catch is we need to say it in as few words as possible! For those of you unaccustomed to writing copy, there are several factors considered for each word, phrase and sentence used in a marketing piece.

(1)    Understand there’s Limited Space and Time to get an impactful point across. Copy must be brief, direct and compelling. This is why marketers use 3-5 word bulleted statements, like “Hassle-Free Returns”.

(2)    Benefit-Oriented copy is best. Lead with your product/service’s value to the consumer. Don’t clog space with features. End users don’t care about the “galvanized steel material”, just the “rust-free guarantee”.  Listen for the consumer’s voice in your ear asking:  “What’s in it for me?”

(3)    Use Action Words when possible. They’re powerful and persuasive. Starting with verbs, creates interest, strengthens connections, and appeals to readers’ senses, emotions and feelings.

(4)    Include a Call to Action. Without a “Call Us Today, Sign-Up Now, Download Here, Visit Us At…” statement, you’ll fail to solicit a response. Encourage your audience to take that next step. Measurable responses help determine your ROI and sell your products/services.

(5)    Add an Offer. Information is helpful, but to drive traffic, a discount or value added item is needed. Many people use FREE Estimate. It sounds great, but it’s a common practice therefore, there is no unique advantage for your company, and it is not really compelling.

(6)    Keep your copy Positive and Confident. Nobody wants to read half empty or wishy-washy messages. You’ll never land a job stating: “We’ll try our best to figure out what the problem is and whether or not it can be fixed”.  Instead state: “Our experts will determine a solution.”

Thanks for taking time to better understand the importance of word choice. Find this blog interesting and informative? Please “Like” my article. Prefer long-winded, fluffy adjective filled copy, comment to voice your opinion. We’d love to hear from you. Need marketing help? Contact me at: jdetermann@twochicago.com