Customer lifetime period This is the amount of time that the average customer (or customer segment) remains an active customer with a firm; it is typically measured in years. When a business has a very stable customer retention rate every year, regardless of the length of loyalty of the customer base or improvements and modifications … Continue reading "How to calculate customer lifetime period with a fluctuating retention rate"| Customer Lifetime Value
CJM a Helpful Analytical Tool for CLV Customer journey mapping is a common analytical approach to understand the steps, processes, interactions, and brand touchpoints for the progression of a non-customer to a loyal advocate. These are the same steps that a brand needs to progress through in order to maximize customer lifetime value: from new … Continue reading "Customer Journey Mapping (CJM)"| Customer Lifetime Value
Many thanks for your donation – it is greatly appreciated. Remember to access the Excel downloads available on this site: Customer lifetime value template Customer equity calculator| Customer Lifetime Value
Customer equity is the total of all customer lifetime values of both current and future customers (please refer to this article for more information on how it is calculated). This means that customer equity is a single measure of all future profits (on a discounted basis) that will be generated by the firm’s (or brand’s) … Continue reading "Why Customer Equity is a Powerful Marketing Metric"| Customer Lifetime Value
Defining Customer Equity Customer equity is the sum of all customer lifetime values for a firm. In other words, we calculate each customer’s lifetime value and we total all of these values together to determine customer equity. Customer equity, therefore, is the total expected profitability to be generated from a customer base over time.It is … Continue reading "What is Customer Equity?"| Customer Lifetime Value
You can download the free template here…customer equity template Below is an information video – but also see What is Customer Equity? and Why it is a powerful marketing metric.| Customer Lifetime Value
Using CLV to determine Marketing ROI Let’s assume that: the average customer acquisition cost for a company is $100 the average annual profit for this customer cohort is $60 and the average customer lifetime is three years. The firm determines that the profit contribution is $180 before consideration of the initial acquisition cost (which means … Continue reading "Customer Lifetime Value (CLV) may be more appropriate than Marketing ROI"| Customer Lifetime Value
evus TECHNOLOGIES has a great article on various ways of measuring and tracking the performance of a mobile app. They review 50 different KPIs (key performance indicators) that are relevant to mobile app metrics, including a look at customer lifetime value, retention rate, and customer acquisition cost. So if you have a special interest in … Continue reading "Great Article on CLV for Mobil Apps"| Customer Lifetime Value
One of the major impacts on overall customer lifetime value (CLV) is the firm’s ability to retain customers. An increased loyalty rate can substantially increase the average lifetime period of the customer, resulting in a significant increase in customer lifetime value. However, it is unlikely that any cohort of customers will have a static retention … Continue reading "Customer retention rate should increase over time"| Customer Lifetime Value
Perhaps one of the confusing aspects of calculating customer lifetime value (CLV) is working out the average period that a customer purchases from the firm/brand. Sometimes it seems inconsistent with…| Customer Lifetime Value
