Do you know the value of the customer life cycle? Do you calculate Return On Marketing Investment? More and more businesses are doing it but there are challenges and different approaches.
Nevertheless, to be able to work in a data-driven and customer-centric manner, it is an important exercise.
The value of the customer life cycle, also called CLV, looks at the investments we plan to make for the customers (retention, sales, promotion, customer service, etc) and the return we expect from the customers. CLV has everything to do with the present and the future. It is the present value (expressed in your local currency) of the expected future cash flows from the customer.
The problem with calculating the CLV this way is that it happens from a global perspective (customer base), and it is difficult to use to calculate the value of the customer life cycle on micro levels like a marketing plan. Read more »
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