What is the lifelong value of the customer?
The value of the customer's life is an assessment of the potential for the current relationship with the customer to continue to the future, thus generating cash flow for providers for a certain period of time. Sometimes known as the lifelong value of the customer or simply lifelong value, the focus of this type of evaluation is established and maintained a permanent relationship with the consumer, rather than just generating a one -off sale. Many businesses seek to identify ways to expand the lifelong value of the customer or capital of each client's customer, often by providing auxiliary support that exceeds the quality products that result in sale.
The part of the process of evaluating the lifelong value of the customer or CLV includes identification of ways to maintain consumer business as soon as it is earned. Depending on the type of product purchased, it may include providing permanent support for a type. For example, a magazine can offer subscribers ongoing support inforMA Department of Customer Service, which responds to questions or concerns about the delivery of magazines. Customer service and support can also offer subscribers discounts on a subscription to apply in the near future, or any other relevant problem that the customer can submit. The idea is that by offering this ongoing support to consumers, consumers will probably return over the years again and again because of the positive relationship and the trust that has developed.
There are several other factors that can be involved in the process of determining the value of the customer's life. One of the more common approaches is the calculation of what is called the low tide. There is an emphasis on predicting a percentage of consumers who do not stay customers for various reasons after some time. The intention is to find out when it must be brought new customers to replace those who leave and find the ways in the way JIf you keep the turn at the customer base as low as possible.
Most of the attempts to project the lifelong value of the customer will also address the cost of reimbursement in detail. This factor is the idea of deciding whether the company would generate a higher return on replacing the lost customers with new ones that apply standard or published rates for offered goods and services. At the same time, the company would also consider the possibility of offering discounted rates to existing customers as an incentive to continue their business with the company. If it is determined that the volume of business generated by the customer is considerable and the possibility of replacing the lost income by a number of smaller customers who generate smaller volumes, but pay full retail rates, is not reasonable, there is a good chance that the company will offer more motivation customers to continue the relationship.
Identification of the lifelong value of the customer allows you to plan operating budgets in advance, with adequate certainty,How these budgets will be financed. As a further advantages of the process, the evaluation of the lifelong value of the customer can often provide inspiration for better ways of organizing a production process, to improve the quality of existing products and improve the level of customer support offered to consumers. From this point of view, the value of consumers' life is not just about determining how long customers will continue to spend money with the company, but also how to help the business smarter and address more consumers, while maintaining the current customer satisfaction.