CLV and Customer Relationship Management (CRM) The customer lifetime value equation essentially views a customer as an income stream. So instead of considering the customer’s purchases as single transactions, the marketing focus becomes creating ongoing series of profitable transactions. These ongoing transactions are created through customer relationship management practices and strategies – with the success … Read more…
Let’s look at the main CLV formula is two ways – the first way in words and then as a CLV equation (see separate article on another one of my websites). As you will see, the main customer lifetime value formula is an extension of the simple CLV formula. The main changes are that the … Read more…
There are two main approaches to calculating customer lifetime value.This article discusses the simple approach to calculating customer lifetime value – which is appropriate to use when customer profit contribution to each year are relatively flat. It is also a good idea to review the article on the full customer lifetime value formula, also available … Read more…
Why calculate customer lifetime value? Why has customer lifetime value – along with many other marketing metrics – becoming more important for marketers to use and understand? One of the key drivers is the shift from “art” to “science” in the marketing profession. For many years, marketing was essentially a creative process or a people … Read more…
What is Customer lifetime value? Customer lifetime value is a measure of customer profitability over time. To help explain this concept, let’s start with a formal definition of customer lifetime value (CLV) from a well-regarded marketing metrics textbook. In the textbook Marketing Metrics: the definitive guide to measuring marketing performance (Farris et al 2010), the … Read more…
Customer lifetime value is often called marketing’s golden metric. Certainly in most service industries, customer lifetime value would be a very important marketing metric. Customer lifetime value can be calculated quite simply at times, with a ballpark estimate. This may be appropriate for quick calculations and for general comments within a meeting, but is not … Read more…
Brand personas are commonly used in customer journey mapping, but are generally helpful in most aspects of marketing strategy development. This is because a brand persona – which is a representation of the typical customer in a target market – helps the firm more clearly understand the consumer. Generally firms will develop multiple brand personas … Read more…
Using Brand Personas in Customer Journey Mapping A fundamental principle of modern day marketing is to segment the market and select appropriate target markets. For more information on the market segmentation process, please refer to the market segmentation study guide. Target markets are smaller parts of the overall market, where consumers are grouped into sets … Read more…
What is a customer journey? Let’s start our understanding of customer journey mapping by first understanding what is meant by the “customer’s journey”. As suggested by the name, a customer journey is the progression of a consumer (initially a non-customer of a brand) in their journey to becoming a customer of the brand. Understanding the … Read more…
Three main phases of a customer journey Customer journeys, particularly for high involvement purchases, may take years to lead to a purchase decision. For example, a young consumer buying their first brand new car would have years of experience of seeing cars, seeing promotional campaigns and product placement, being involved in discussions regarding motor vehicles, … Read more…
