As we can see, Customer Lifetime Value is an important metric for companies, as it allows them to evaluate the profitability of their customers. A high CLV indicates that a company's customers are profitable, while a low CLV indicates that the customers are less profitable.
To calculate it, it is necessary to collect data on the average purchase value, purchase frequency, and average customer lifetime. This data can be captured through CRM systems , data analytics, and customer surveys. Once this valuable indicator is calculated, it can be used to make relevant decisions about the marketing and sales strategy. For example, a company can focus its efforts on attracting and retaining customers with a high CLV.
Among the main uses of the concept, we can highlight the following:
Evaluate customer profitability
As we have already mentioned, it provides us with a measurement that allows us to classify clients based on how profitable they are. Based on this, actions can be taken to boost or improve this level of brazil number data profitability. This information makes it easier to make adjustments to the marketing budget with very specific approaches.
Identify opportunities for improvement
Simply focusing efforts on attracting and retaining customers with a high CLV is already a productive strategy in itself. As obvious as it may seem, this is often not done.
Make strategic decisions
Another useful feature of this indicator is that it helps companies make strategic decisions, such as allocating resources or developing new products and services.
For example, a mobile phone company might use CLV to determine how much it should pay its salespeople for each new customer it signs up for. In another case, an e-commerce company might use it to decide whether to offer free shipping to its customers. A subscription services company, on the other hand, might use it to determine how often it should send promotional emails to its customers.