Customer Lifetime Value

I work for the Indiana State Medical Association (ISMA), a member based physician organization. The ISMA keeps a detailed database of all its members including dues dollars and other financial contributions such as political action committees. The database also shows each member’s history which can be used to analyze the physician’s behavior and predict their future actions. This gives the organization a unique position to determine customer lifetime value. The database directly shows how much money each member contributes and how long they have contributed – which gives them a number value. These numbers can be compared to marketing and acquisition costs.

The database can segment members into groups based on specialty and demographics to allow for marketing messages for retention campaigns.  Since the acquisition cost of a new member is high, and convincing a physician to renew membership after they drop is very difficult – member retention is a priority. This information has been used recently to implement discounts for group memberships and multi-year memberships.

The database also shows which members engage with the organization and attend educational seminars (another source of income) The money these members spend on ISMA educational offerings not only gives these physicians/staff additional value, but also gives insight for marketing future programs.