How do you decide which customers are the most profitable in your business? Viewing customers as business opportunities in themselves has become a technique that more and more companies are using in their digital strategies. We are talking about Customer Lifetime Value.
In the field of digital marketing, no matter how many strategies we implement in our business, if we do not analyze what works and what does not provide any benefit, we will not be able to obtain the maximum ROI. This principle can be applied to different aspects within a digital business, including customers. This indicator has its own name: Customer Lifetime Value.
Customer Lifetime Value (CLTV) is a metric that helps companies el-salvador phone number data determine the value or profit that a customer represents over a given period of time. It is a marketing principle through which it is essential to know our customer and their behavior in order to determine the value they bring to our business and create a 360º Marketing strategy adapted to them.
Defining customer lifetime value helps us answer the following questions:
Are the customers we are attracting profitable in the long term?
Are we investing enough resources in building customer loyalty and delighting them based on their CTLV?
What strategies do we need to have in place for the future to improve customer loyalty to our brand?
Customer Lifetime Value: How to add value to your customers(Image: Pinterest)
Why you should calculate CLTV
In marketing, it is well known that attracting a new customer is 5 times more difficult than retaining an old one. The customer life cycle is used to calculate the monetary value that each of these cases entails. The objective is clear: to carry out appropriate and profitable actions for the brand. To do this, it will also be essential to understand the customer journey map well ; that is, the path and experiences that the consumer has at each stage of the purchasing process.