When starting a business, it’s easy to overlook some of the more important details once you start getting a customer base. Most businesses rely on getting as many customers as they can as cheaply as they can. This may have been the way to do things in the past, but now things have changed.
So what is Customer Lifetime Value? CLV is something that all big businesses focus on because of its importance. It is the measure of dollars coming in from a customer over the entire relationship with that customer to the business. However, since you cannot speculate how long each customer you have will stay loyal to you, you look at it over a certain period of time. Once you start doing this, the data you collect can show you some fascinating things.
One of the things you might find is where your marketing efforts fell short compared to one customer over others. The other thing measuring Customer Lifetime Value can do is help you refine your marketing strategy so that you are targeting the right customers.
There are many benefits that come from analyzing Customer Lifetime Value including maximizing your return on marketing campaigns, helping to identify and reward those customers who are loyal, and managing your customer relationship as a monetary investment instead of counting them as a number.
Huge industry leaders in eCommerce are outperforming all the rest because of their focus on retaining customers. Some eCommerce giants are reporting 60-80% retention rates while others are reporting only a 20% rate!
Do you want to learn more about CLV?
Contact me at johnny@johnnymurray.com to learn how we can help you effectively measure your Customer Lifetime Value.
Johnny Murray
johnny@johnnymurray.com