How absurd is it that I've been treated better as a new customer than as a loyal member? What do I mean by that? Well the attention and service I received as an occasional customer is incomparable to the way I was treated after I became a loyal member. It's so absurd that I canceled my membership just to be recognized as a new customer again. And it's a shame, because these companies lost so much potential revenue by missing the opportunity to reap the benefits that a loyal customer can bring.
The potential revenue that a customer will generate during the lifetime of doing business with you is called customer lifetime value. In general, CLV is an important metric for businesses who need to understand how much they want to spend on bringing in new clients, and how much exciting clients can bring in. If you are looking to improve retention rates in your business, the CLV is your most crucial metric.
By calculating CLV you can find out important information which can help you decide how to allocate your resources for marketing, customer retention and other areas so you can get the best possible return for those resources. For example: you can use CLV data to help build more accurate and detailed customer personas. Customer lifetime value helps you spend advertising and marketing dollars wisely, so eventually you get the highest profit to your company.
Products and services may be easy for competitors to copy, but a company that is good at creating customer loyalty is less vulnerable to attacks from competitors; and brand loyalty is much more difficult to copy.
So don’t just focus on bringing new clients in. Focus on the ones you already have. They could be the key to the success of your future.