CONROY’S ACURA: CUSTOMER LIFETIME VALUE AND RETURN ON
Mike Moffat wrote this case under the supervision of Professor Kyle B. Murray solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey…show more content… De Lima believed this method understated the true value of her efforts, because it did not take into account that 25 per cent of customers who bought a car today would also buy their next car from the dealership. To get an accurate gauge of the dealership’s marketing efforts, this statistic needed to be taken into account.
Conroy was also very concerned with quantifying the return on marketing. He had seen more than his share of creative marketing ideas that did not produce a tangible financial return. Although brand building and general recognition were important to him, his dealership was now well-known in the community and, at the end of the day, he wanted new marketing initiatives to provide a compelling return on his marketing investment. T
Sales could be broken down into two types: sales to new customers and sales to previous customers.
Conroy’s Acura used a two-pronged marketing approach to gain sales from each group, but spillovers occurred; a billboard designed to gain new customers could also help the dealership to retain its existing customers. N
INCREASING THE NUMBER OF NEW CUSTOMERS
Most of De Lima’s ideas to increase the number of new customers were simply to do more of what they were already doing: more direct-mail postcards, more billboards, and more advertisements on television, on radio and in newspapers.