Why Customer Lifetime Value may be your most critical metric-1


The most valuable marketing metric — and, overall business metric — is Customer Lifetime Value (CLV). Some marketers refer to CLV as Lifetime Value (LTV), which might give away their background. Followers of Pete Fader’s marketing science methods from the Wharton School of Business tend to say CLV. CLV uses predictive analytics to tell you who your most valuable customers are.  Once you identify who is a good customer and who is not, the basis of all your other metrics should change accordingly. Reframe paid search by CLV and you’ll likely save millions. Reframe surveys, product improvements, and customer service by CLV and your business will generate better insights faster with more financial impact.

 

 

 

 

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Knowing the predicted value of each of your individual customers is at the heart of Customer Centricity. Using the right approach to calculate CLV is critical. In this podcast Allison and Artem Mariychin, co-founder of Zodiac walk through the proper way to approach calculating heterogenous CLV.     

Note: Our former partner, Zodiac has since been acquired by NIKE and their clv calculation product is no longer available to the public.  We can calculate and evaluate CLV model fit for you.

 

 

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Understanding the value of each customer opens the door to analyzing where they came from and creates opportunity to prospect for more customers who are likely to bring high value to your organization.  

 

 

 

Customer Lifetime Value's Role in a company valuation

 

Customer equity, the total predicted CLV of an organization's customers plays an increasingly important role on the overall valuation of companies.  In the following podcast, Allison discusses Customer Equity with Anthony Cho, Founder of an angel inverting firm that focuses on emerging Direct to consumer start-ups.
Knowing the predictive future value of your customer base and understanding whether it is growing, shrinking or stagnant can help whether your pitching for funding or reassuring your board of directors.

 

 

 The Transformative power of customer lifetime value-3

Many organizations drive to key metrics, but suffer from the fact that these metrics aren’t aligned .  When each department is measured by internally focused KPIs every team is pulling in a different direction.  By aligning the entire organization around the customer, companies can get everyone pulling in the same direction leading to significant competitive advantages.

In the following podcast, Allison chats with Zack Anderson of gaming giant Electronic Arts about the Player First approach that has transformed their business.

 

Ambition Data’s CLV Offerings

 

Calculate CLV

Let us classify your customers using CLV to understand who your high, medium and low-value customers are.

 

CLV Simulation

Practice making Customer-Centric Decisions without using your company's Data

 
CLV Strategy

We’ll model your customer database to pinpoint bottom-line dollars so you can outrun the competition.