The 5 Benefits of Customer Lifetime Value

The Customer Lifetime Value refers to the amount of profit you make from one customer as they purchase your products and services over their lifetime. When you plan your marketing with this in mind, you’re focusing on retaining customers and upping their purchase levels.

The 5 Benefits of Customer Lifetime Value

So why should you bother to market to people you’ve already sold to? It’s always easier to gain more sales from your loyal customers, than it is to constantly throwing your precious resources at lead generation and having a high rate of customer churn. Here’s why it’s so much easier:

1.    Save Money

It’s cheaper to retain old customers than find new ones. When you know your customer you know what benefits they seek and you can focus your resources on these, rather than trying to please everyone.

Channels for finding new customers are also expensive and time consuming. Radio ads, T.V., newspapers, Google and social media ads all cost you money.

However, if you have someone in your database, you can send them emails for free. So long as they’ve given permission! Have you got your CRM sorted? If not, check out our post compiling the five best Open Source CRM Systems.

2.    Better Marketing

Customer Lifetime Value leads to marketing that focuses on your customer. This equates to toting the benefits of your product rather than the features. Would you prefer a green apple? Or a snack that will enable you to focus on the morning’s task and feel healthy all day long?

3.    Encourage Brand Loyalty

Regular contact enables you to foster brand loyalty. Remember to give them something they’ll benefit from, such as a free e-book, how to video or insider tips. Your customer is always asking, ‘what’s in it for me.’

4.    Gain More Sales

You’ve already warmed up your customer from all that regular contact. Now you can send them your latest promotion with a persuasive call to action. Need some guidance for writing emails? Check out our 10 Email Marketing Tips.

5.    Save Time

By concentrating on your target market and loyal customers, you’ll save time and money by not wasting effort on those not worth the headache! If you’ve already sorted out your CRM (and if you haven’t check out these free CRMs!) then you’ve already done the most time consuming part.