Grasping The Lifetime Value Of A Customer
The lifetime value of a customer is defined by how much revenue a customer might bring to a business throughout their entire relationship with that particular company. While determining that requires speculation and possibly some investigation, it can be done fairly accurately.
To maintain a thriving business, representatives should think past the basics of making one-time sales and focus on the lifetime value of a customer. The knowledge gained from analyzing the customer’s journey over an extended period, beyond what they purchase the first time, can be powerful when making future business decisions.
The lifetime value of a customer
The ideal customer relationship includes much more than a one-time buying experience. It consists of multiple happy experiences that tie a customer to a specific brand. The brand becomes their regular go-to for purchasing a specific product or service, and both parties feel somewhat loyal to each other.
By analyzing each customer interaction beyond a customer’s first purchase, it enables marketers to better understand the purchasing cycle of those who buy from them.
As a marketer who is tasked with producing ROI, it helps to know which customers have the potential to provide the highest ROI over long periods of time. On top of that, representatives never know who someone may bring to a company who may provide future revenue. Thus, it only makes sense to look at every customer as a potential gold mine and serve them accordingly.
Important to understand regarding the lifetime value of a customer
Companies who invest in marketing usually benefit from considering the full lifetime value of a customer. Providing great customer service, selling quality products or services at competitive prices, and recognizing customer’s needs from their perspectives will genuinely help customers feel good about buying from you. What can turn them into customers for a lifetime is giving recognition, treating them fairly and honestly, providing discount and/or loyalty programs, perks, giving friendly service at all times, and helping them feel you are truly interested in their success.
The companies who truly understand their customers, including their personalities and their businesses, will succeed in creating loyal customers who keep coming back if they focus on doing so.
For companies who are committed to marketing, it pays to consider how much revenue a customer can provide long term. Sometimes considering future gains more than immediate gains can lead to greater success long term, and all customers should be treated with this point in mind.