Deadly Venom and Lifetime Value
Originally published in MediaPost.
The best book on marketing analytics that I’ve read is not about marketing analytics at all, but rather about snakes, scorpions, spiders, and jellyfish. In Venomous, biologist Christie Wilcox walks through the unique physiology and evolution of venomous animals, from cobras to platypuses and everything in between.
Aside from being a fascinating book to read (come on, snakes!), Venomous becomes instructive for marketers when Wilcox talks about the one of the most common questions somebody who studies venom gets asked: “What is the deadliest venom?” It seems a deceptively easy question to answer, until she unpacks it.
Venom lethality is commonly measured on a scale known (creatively) as the Lethal Dose 50 (LD50), which grades the amount of venom needed to kill 50% of a tested sample. So one would think that you simply find the smallest number (.00015 mg/kg for a zoanthid—a relative of coral. One gram of its venom is sufficient to kill 80 people) and that would be it.
But while the palytoxin employed by zoanthids is, indeed, incredibly dangerous, the actual number of deaths that result each year from accidentally running into an enraged toxic coral is so rare that there are no statistics on annual deaths. Which begs the question: How can we legitimately call something the “deadliest venom” if it doesn’t cause any deaths?
Let’s compare that to the mosquito, which is also technically “venomous,” but only in the same way the Sahara Desert is technically “moist,” or the 2016 Presidential Election was technically “a teachable moment for Democracy.” The venom from a mosquito is so NOT-deadly that I couldn’t even find a score for it on the LD50scale.
Mosquito venom really only contains a mild anticoagulant (so your blood doesn’t clot) and a mild analgesic (so you don’t feel anything while it feeds). And when you are looking for animals that are considered stone-cold deadly, the word “mild” usually serves as an immediate “thanks, we’ll call you if we need anything.” But the barely-there venom that allows mosquitos to feed also allows them to transmit some of the world’s deadliest diseases. Malaria and yellow fever kill hundreds of thousands of people per year; far more than all venomous snake bites or scorpion stings cause annually, combined. So now we have one of the weeniest venoms (from a toxicity perspective) making a legitimate case as the deadliest venom on the planet as well.
Which one is the winner? Well, both…and neither…depending on why the asker was curious about the question in the first place.
Which is why I think this is such a great analogy for where the best laid measurement plans for marketers go wrong so quickly. The definition of the word “customer” in marketing, like “deadly venom,” seems so obvious. I buy some gum or a car from your store, and ta-da!—I am your customer. But being a customer is a relationship, not a point in time, and yet all too often our measurement plans rigidly focus on the single purchase event.
“What campaign sold the most?” is the common (less cool because no snakes) question we get asked. This makes a lot of sense from a revenue recognition perspective, but it risks skewing long-term planning, especially against existing customers or for customers not ready to buy yet. One’s definition of success, be it for the deadliest venom, or long term customer engagement, should be defined broadly and reflective of prioritized business goals. If we over-focus on a single metric, too narrowly defined within that umbrella, we may place all of our medical and research funding on anti-venoms for the dreaded death coral that actually kills no one, rather than the laughably impotent mosquito venom that is incredibly dangerous as a disease vector across much of the planet. Or we re-hash campaigns that bump sales in the short term while chipping away at high value relationship building in the long term.
I grow innately nervous when I see a measurement plan, even for the most basic of campaigns, that doesn’t take into account lifetime value (LTV). LTV forces us to look at a customer beyond a single sale or any other metric into how successful our relationship is likely to be over the long haul. That macro view helps justify some decisions that may look counterintuitive in the weeds.
Do we risk a holiday offer that boosts sales in the short term but that cheapens the premium brand for existing loyalists in the long term? Are we really moving the needle forward if we increase lead generation at the expense of known quality?
How we define our goals and the key indicators for those goals, for venom or for value, determines the outcomes of these questions, and the budgets that follow them. It is imperative that we revisit these definitions regularly to make sure that we aren’t measuring something with perfect accuracy at the expense of our goals rather than for the benefit of them.