Tuscan

Kenan Flagler Business School The University of North Carolina at Chapel Hill

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Tuscan Lifestyles: Assessing Customer Lifetime Value

Marketers … have assembled vast databases identifying their customers and their buying habits. With such information, companies now believe it’s as important to reach the right people as it is to reach lots of people. - Business Week, September 23, 1991

It was late one afternoon in February and Joan Beckman was finishing her first month as marketing director for the Tuscan Lifestyles catalog. In a market environment increasingly cluttered with catalogs, one of her top priorities is to begin to use their database of customer information. She is certain that the accumulated purchase history of their customers can be used to increase the effectiveness and efficiency of future marketing expenditures. The Tuscan Lifestyles catalog markets cookware, tableware, linens, and decorative home accessories – all in a style reflective of the Tuscany region in Italy. The catalog has been in business for nearly nine years and has gradually increased its customer base. Tuscan Lifestyles marketing approach has been primarily product-focused with the goal of building a solid base of popular, ‘staple’ items which are complemented by a changing assortment of both seasonal and trendier items. Like other catalogs, and retail businesses in general, Tuscan Lifestyles seeks costeffective ways to find and retain a loyal customer base. Many of the items in the catalog are

This case was produced by Professor Charlotte Mason of The University of North Carolina at Chapel Hill. This case serves to provide material for class discussion rather than to illustrate either effective or ineffective handling of a business situation. Names and data have been disguised to assure confidentiality. The assistance of the Direct Marketing Educational Foundation in supplying the data used for this case is...