Unknown About Customer Lifetime Value For CRM

Unknown About Customer Lifetime Value For CRM

Unknown About Customer Lifetime Value For CRM




At the end of this article, readers should be able to:


  • Define Customer Lifetime Value
  • Appreciate the Importance of CLV
  • Appreciate how to maximize the lifetime value of a customer
  • Appreciate the purpose of CLV in an enterprise




Customer Lifetime Value (CLV) can be seen as the expected financial benefit from customer retention investment to build customer loyalty, Simply, it is the total amount that you expect your customers to spend on your product throughout their lifetime.


Lifetime Value of a Customer

By calculating CLV, you as a 0kM manager can measure the expected financial benefits from customer retention investment to build customer loyalty You will be able to know which of your customers you should invest in and the one that you don’t need to bother yourself about.


The calculation of the lifetime value of your customer will reveal the lifetime cost of the customer which includes acquisition cost, operation expenses and customer services that you offer to your customer. It will also show the expected lifetime revenue of a customer

Unknown About Customer Lifetime Value For CRM

Importance of CLV

From what we have said, CLV will allow customer-centric organizations to know what they should expect from their customers. There are many benefits that accrue to CCEs.


One of the benefits that can be attributed to CCE is the fact that it allows organizations to minimize wastage and maximize cost. It will help you to know the number of resources that you could spend on a particular customer


Another benefit of lifetime value is that it will allow organizations to come up with strategies and programs that will enable them to give their customers a “wow” experience. If you have a profitable customer base, you will not want to lose them. You will want to put pieces of machinery in place in order to ensure that the customers are satisfied so that they can remain with you for life. That is why you have to carry out a comprehensive CLV analysis of your customers in order to know the proper way of serving them better.


Maximizing Lifetime Value of a Customer

This requires that you maximize the rate of new customer acquisition, the conversion rate of prospects to buyers and the repeat frequency of existing customers. When you want to get the best from your customers, you have to improve the rate at which you convert prospects to buyers. You must also guide against losing your hard-earned customers to your competitors.


You should know that it is very expensive to acquire new customers. Besides, the new customers are not contributing to your profit base now, they will be contributing in the future. It is from your existing customers that the bulk of your profit is coming from. That is why U is not logical for you to build your business on your first-time buyers alone.


In a product-centric enterprise, profits are determined by calculating the cost of product and other associated costs and subtracting if from the total cost but in a CCE, you have to consider the customer service cost and weigh it against the lifetime value of a customer. You have to increase what you spend on customer value. Therefore CLV is a projection of what a customer will worth in the future.


The purpose of CLV is to encourage the organisation to spend a large percentage of its resources on adding value to their customers. The application of CLV is to encourage organizations to embark on programs that will improve customer lifetime value.



In this article, we have discovered that:


  • CLV is the expected value that a customer is expected to contribute to your organisation over their lifetime.
  • CLV is also the calculation of the acquisition cost, operating expenses and customer services.
  • CLV wilt help organizations to minimize wastage and maximize cost.

With the knowledge of CL~ you should be able to raise the exit barrier and draw

more people to your lifecycle.

  • CIV can help organizations to spend their resources effectively on adding value to their profitable customers.


Brainstorming Session

  1. What is Customer Lifetime Value? How can you maximize the lifetime value of a customer?
  2. Discuss the reasons why top management in various organisations in Nigeria are afraid of CRM?


Now your take on this article…

I know you might agree with some of the points that I have raised in this article. You might not agree with some of the issues raised. Let me know your views about the topic discussed. We will appreciate it if you can drop your comment. Thanks in anticipation.



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About Adeniyi Salau 829 Articles
I am an IT enthusiast and a man of many parts. I am a Certified Digital Marketer, Project Manager and a Real Estate Consultant. I love writing because that's what keeps me going. I am running this blog to share what I know with others. I am also a Superlife Stem Cell Distributor. Our Stem Cell Products can cure many ailments.

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