I strongly believe Customer Lifetime Value (CLV) is the power metric for understanding your customer’s short-term loyalty, it’s the one that counts. I appreciate the metric cannot predict customer behavior in the long term, but with the continual introduction of new technologies and the speed competitors come to market, marketers need to be more dynamic, it’s a learn and pivot world out there, short term works for now!

James Freshwater from SaaS software provider CIC Plus says “The CLV metric is key to making important business decisions about sales, marketing, product development, and customer success. A customer focused approach is more quantifiable, and, in my experience, an effective customer relationship management program increases profitability over time”.

An ongoing connection and appreciation throughout the customer journey life-cycle (stranger through to advocate) drives engagement, increases sales and improves customer loyalty. It is easier and more cost effective to nurture, grow and retain existing customers than to generate new ones.

The three wise monkeys, and the associated proverb, see no evil, hear no evil, speak no evil no longer reigns true within business. With customer preferences changing, external environments and new trends impacting behaviors, organizations need to listen to the customer and respond to their changing needs to improve customer retention and profitability.

With the right technology in place to analyze the data the CLV metric helps businesses to;

• Focus marketing efforts on high CLV audiences
• Calculate marketing RoI, down to bottom-line financial impacts
• Gain valuable insights into the forecasted net profit of customers
• Decide on an upper limit spend to acquire and keep a customer relationship
• Create strategies to reduce potential churn
• Improve customer service procedures