Customer Value:
Customer Lifetime Value is probably one of the most important and valuable metrics but is also the least understood. Researchers have found that just 42% of companies are able to measure their CLV accurately! According to Dr. Philip Kotler, “Losing a customer does not mean losing a single sale but in fact losing the entire stream of purchases that the customer would make over a lifetime.”
These are some of the highly popular customer lifetime value articles from the last quarter curated by VOZIQ’s internal team.
What exactly is Customer Lifetime Value and why should you care?
This is a metric that is often misunderstood and, even more often, overlooked completely. In a nutshell, Customer Lifetime Value is the calculation of what a customer might be worth to your business over the course of doing business with you, perhaps over the course of a few years as opposed to a single transaction.
So, who should care about Customer Lifetime Value? For businesses that offer a customer multiple transactions over time, the concept of Customer Lifetime Value is pretty significant. For businesses such as home builders, who might only work with a customer once in their lifetime, this concept might not seem to matter. Isn’t this interesting?
Four steps to maximizing Customer Lifetime Value
Focusing in on, and maximizing, customer lifetime value isn't difficult if you're committed to it and have the right tools. Most B2C marketers use customer lifetime value as an input to determine how much is reasonable to spend to acquire a new customer i.e. customer acquisition cost (CAC). But for top-performing B2C companies in the world, CLV is the metric on which business decisions are made.
Here's why:
- It's a faster path to revenue.
- It's an easier path to revenue.
- For both reasons above, it's a more profitable path to revenue.
- And, of course, it justifies increased spend on customer acquisition.
How 5 brands grew their Customer Lifetime Value 2X in less than 1 year with Loyalty Programs?
Retaining customers isn’t easy, but it’s important to do for businesses of every size. After all, the sure fire sign of a healthy brand is a growing number of repeat purchases from already existing customers. Growing your customer lifetime value and building long term customer loyalty takes time, though. It can’t be created overnight. Earning increased repeat business and building customer lifetime value is doable and you can start right now.
Ignite growth by rallying your organization around a customer-first mindset
To drive growth, brands must attract and retain high-value customers. Marketers are struggling with channel and product-first mindsets that don't allow them to put customers at the heart of their strategy. But some marketers are beginning to break through. Focusing on Customer Lifetime Value (CLV) is the first step. To do that, brands need to break down organizational barriers, evolve their data and measurement strategies, and embrace a test-and-learn approach.
We hope that you have enjoyed reading these articles. For busy customer retention leaders like yourself, our curators have compiled few more popular articles on various customer related topics from the last quarter.
Click the below image to download the complete list in PDF format.
