What is Customer Lifetime Value and how to increase it?
May 8, 2024
Customer Lifetime Value (CLV) measures the total value a customer contributes to your business over the entirety of their relationship. It considers factors like spending amount, relationship duration, and purchase profitability. CLV is calculated as:
CLV = Average Transaction Size x Number of Transactions x Retention Period
Here are three strategies to enhance CLV:
– Increase Purchase Value: Upsell intelligently based on customer knowledge to boost retention and CLV.
– Extend Customer Lifespan: Enhance customer service to lengthen the lifespan of your relationships. Developing a solid customer service strategy starts with understanding who your customers are.
– Increase Contact Frequency: Engage more frequently using various channels such as video, social media, and email to maintain interest and loyalty.
Improving CLV depends on deep customer understanding, quality service, and consistent engagement after purchase. These points outline the essentials of CLV, its importance, calculation, and enhancement techniques.
Customer Lifetime Value (CLV) measures the total value a customer contributes to your business over the entirety of their relationship. It considers factors like spending amount, relationship duration, and purchase profitability. CLV is calculated as:
CLV = Average Transaction Size x Number of Transactions x Retention Period
Here are three strategies to enhance CLV:
– Increase Purchase Value: Upsell intelligently based on customer knowledge to boost retention and CLV.
– Extend Customer Lifespan: Enhance customer service to lengthen the lifespan of your relationships. Developing a solid customer service strategy starts with understanding who your customers are.
– Increase Contact Frequency: Engage more frequently using various channels such as video, social media, and email to maintain interest and loyalty.
Improving CLV depends on deep customer understanding, quality service, and consistent engagement after purchase. These points outline the essentials of CLV, its importance, calculation, and enhancement techniques.
