The problem confronting marketing executives is how to allocate the marketing budget across demographic, geographic or product segments. We developed the MSA software to help executives optimally apportion their marketing budgets among these segments with respect to acquisition and retention. The benefit of using the MSA software is that companies can improve customer lifetime value and increase profits.
Using historical data, the MSA software requires inputs about acquisition and retention for each segment in the following areas:
- Number of prospects/customers in a period
- Number of prospects converted to customers/customers retained
- Profit margin on transaction
- Acquisition/retention cost
- Discount rate (cost of capital)
- Ceiling acquisition/retention rate