A Deep Evaluation on Analyzing Customer Lifetime Value
- Posted on July 16, 2022 by Robert
- Reading time about 5 minutes
Maximizing CLV is quite a buzzword these days and why not, it’s the only business goal one must consider in terms of accelerating business outcomes. Business owners are regularly finding better strategies to create value for their customers. Measuring the customer lifetime value is generally associated with having a customer retention program in place, but is it the right parameter?
Let’s first understand what the sort of values are which a customer can bring to a business? It can be brand advocacy, data provision and referrals but that’s still just a beginning! Let’s delve deeper and have a complete understanding on customer lifetime value, its parameters and why businesses should care about determining the same.
Understanding Customer Lifetime Value
In the ultimate calculation, customer lifetime value is measured on the basis of a customer to a business over the entire course of journey of their relationship with the business. The reason why it carries such importance is that it determines how much one can or how much one should be investing in any customers on the basic level. Though an overall measure breaks down to the costing involved. For a business it’s always costly to acquire a ne customer rather than retaining the existing one.
What Values does Customers Contribute to a Business?
It’s not always about the business only, sometimes we have to understand what value will the customer contribute to the business, here’s what you need to know-
According to a stat, customers acquired through referrals have a 37 percent higher retention rate than their counterparts. The customers who come through referrals have 81 percent more chances to engage when a brand is already equipped with a customer loyalty program. Referrals thus are a great contribution in the journey of customer retention.
· Data Collection & Analysis
Data is an excellent source of forecasting demand and managing customer relationships at the same time. It adds in increasing retention and tailor the offering likewise to suit the customer requirements instantly. Maintaining and acquiring the customers hugely contributes in increasing the data and that in turn has a great capability to give you some impactful customer insights to boost your business strategy and inject actionable strategy as well.
· Brand Advocacy
Sometimes we confused brand advocacy to referral programs, there’s a big difference between both! Referral programs are incentivized and often have a lucrative reward attached. However, brad advocacy is all about non-rewarded genuine form of word of mouth marketing which is more effective than probably any other form of marketing. And why’s that? Because it is genuine and not paid promotions, being proven to increase marketing efficacy by 54 percent.
How to Maximize Customer Lifetime Value?
For a brand the customer lifetime value may concern to a huge extent, are you looking for the right ways to maximize it? Here’s what we have in store for you-
· Make it Memorable
It’s imperative to make your customer experience memorable and increase the customer lifetime value at the same time. Calculating the customer experience is particularly measured in phases, throwing the most direct impact on the customer’s perception of the brand, their intent behind the purchase and the loyalty to consider. To believe the stats, 60 percent of customers have made more purchases when they experienced a positive overall experience from the brand, while 65 percent of customers who encountered a negative experience have never returned.
· Maintaining Consistency
To stay consistent, you must have a strong brand with some distinctive offerings to stand out from the crowd. You must have an edge on educating people that you exist and that can be considered as a role of marketing in every business aspect. A stat says that a consistent and clear brand communication has been proven to elevate the revenue by as much as 33 percent. Stay on the top f your game and incorporate automation triggers to include in your marketing campaigns. Manage, run and structure them for being consistent in the longer run.
· Implement a Customer Loyalty Program
No matter if you have ever considered having a loyalty program integrated with your business, it holds a dire importance! Why’s that? It’s because launching the right loyalty program can help you in managing so much stuff which includes campaigns, email marketing, customer data, maintaining customer relationships, sending out customer rewards and having a clear picture of the business growth and goals for a longer run. The benefits do not limit to just these, an appropriate loyalty program can help in creating a emotional connection with a brand which allows them to reward the referrals, provide customers with a memorable experience while shopping and encourage brand advocacy at the same time. if it’s not what you would like to have then what will?
Measuring, managing and analyzing customer lifetime value is the go to aspect for almost all the brands around you! And when you, yourself is a well-established business, consider having a brief analysis about your customers as the major trigger to better business outcomes and strategies to be followed in the journey. Still in splits to know more on implementing a customer loyalty program with your brand? find the right loyalty solution provider and we guarantee that you would at least have a clear idea on what exactly needs to be done or simply get started with a loyalty program exclusively curated for your business instantly.