How Can I Measure
Customer Lifetime Value?

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Calculate your Customer Lifetime Value (CLV), target profitable customers and boost your bottom line.

CLV identifies your profitable customers; not just the ones that generate revenue. It combines what makes a customer profitable with how to identify which customers yield the best margins; how to build buyer personas to target new customers; and the importance of a CRM solution to support these activities and increase Return On Investment (ROI). Fortunately, Maximizer CRM helps you measure CLV and use this information to your competitive advantage.

The 80/20 Rule

In most businesses, 20% of customers account for 80% of a company’s margins, so there is huge value in knowing who your top 20% are.

Customer Relationship Management

To calculate CLV, segment your customers and build buyer ‘personas’ based on real data. Start by capturing client information such as industry sector, demographics, buying behavior, preferences, personal details and individual circumstances. These personas help you to understand the needs, motivations, concerns and spending patterns of customers in various segments.

Data Analytics

To understand what an individual customer is really worth to your organization, you need to calculate their CLV. Avoid focusing on transactional value and consider instead the acquisition cost, along with the investment required to maintain the ongoing relationship. This calculation should include further marketing communications, post‐sales follow‐up, servicing and time invested in managing the customer relationship throughout the customers lifetime – all play a significant part in the post‐conversion tally of CLV.

Marketing

If you don’t ascertain the CLV for all customers, you don’t know which ones are draining your marketing, sales and support resources. Using CLV, you can target specific customers and prospects to yield the highest return on investment.

Forecasting

Now that you’ve identified your CLV and most profitable customers, you can target your marketing and sales campaigns effectively rather than waste marketing budget. Using Maximizer CRM and CLV, you should quickly see a higher ROI from marketing spend and be able to forecast campaign success using visual dashboards and ROI information.

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