Acquiring new customers versus retaining existing ones. What is worth investing in and how much? That’s exactly what customer lifetime value will tell you. A metric that will not only advise you how to effectively allocate your marketing budget, but also how to increase your revenue . Discover the value of different customers to your business and learn how to work with CLV.
What is CLV?
The abbreviation CLV comes from the combination of customer lifetime value, or in Czech the lifetime value of a customer . This metric expresses the value of a customer uae whatsapp number data who purchases from you long-term and repeatedly. CLV will then calculate the expected income that this client will bring you for the entire period of your business relationship.
How can CLV help you?
CLV is an important tool especially in the e-commerce sector , where repeated purchases occur. It represents the key to effectively setting the costs that you can invest let’s expand on the above in a customer so that it still pays off for you. In general, lifetime value should be at least (ideally more) three times the cost of acquiring a customer.
Thanks to the customer lifetime value calculation, you malaysia data can find the answer to, for example, these and other questions:
How much will a customer be willing to spend with us if they are satisfied?
Which customer segment should we invest more in to generate more revenue?
What kind of loyalty programs will work for our customers to keep them?
Calculate your CLV
For the calculation you will need:
Average purchase value = how much does the customer buy on average?
Average purchase frequency = how many times a year does the customer purchase?
The value of the customer = his average amount of sales.
Average life span of a customer = how long have they been shopping with you?