By Rowan Jackson.
A recent survey conducted by Marketing Charts of US VP-level marketers indicated that 22% “almost never“ measure CLV.
I find this curious, given that CLV focuses the mind on developing a loyal customer base and maximising profitability and value in the long term –
surely an objective on every CEO’s and CFO’s job description? Sadly, the wide-ranging macro-economic and operational impact of the pandemic, over the last 18 months, has (understandably) caused some businesses to focus more on the short-term.
Understanding and measuring CLV is fundamental, to prioritise action and investment in customer acquisition and retention. Once you dig into it further, you can segment customers, for example, by channel to see comparative data on revenue and profit. This will help companies decide how best to focus their efforts.
For me, the key element of CLV is that it makes you think about developing and protecting customer loyalty. But before you can do that effectively, you have to measure it first. Here we encounter another insidious problem, as many companies measure loyalty using tools and metrics that are unfit for purpose.
Deconstructing that requires another post (watch this space).
For now, I’m interested to hear experiences from people tasked with the loyalty challenge. Do your systems and processes deliver the actionable insight you need to inform effective action?