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Opinion - Customer lifetime value is a powerful metric

2021-09-13  Staff Reporter

Opinion - Customer lifetime value is a powerful metric
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Masiello reminds us that customer service is about more than just solving problems. 

It’s relationship building that leads to long-term benefits for both your customers and your business. Author and business executive Lisa Masiello stated: “Happy customers are your biggest advocates and can become your most successful sales team”. This relates directly to my proficient career, being Manager Credit and Branch Manager in a commercial bank, as providing quality customer service is the foundation of business growth.

Well, while there is nothing wrong in growing your customer base, it’s important to prioritise the value behind customer retention and brand loyalty. To increase sales and build customer lifetime value, it is necessary to communicate with your customers on a regular basis. 

Developing a strong relationship with the customers helps to build a powerful brand in furtherance of brand loyalty and advocacy over time. If you want to build your business on your loyal customers and branding, you have to be ahead of the game by surprising your customers with more than they expect. Increasing customer lifetime value (CLV) depends on your ability to develop both long-term strategies and short-term tactics. 

The customer service landscape is definitely changing; service no longer means solving a customer’s problem when they pick up the phone, and it’s about taking preventive measures and proactively solving potential issues. 

It’s far less expensive for a business to retain customers than it is to acquire new
ones, yet most companies continue to invest significantly more money into customer acquisition than retention. As a result, they do acquire new customers, but they lose a lot along the way. To increase customer lifetime value is to increase sales. 

The goal is to motivate customers to spend more money on every transaction. Once you have your strategies to increase customer lifetime value, you need to identify the tactics to implement those strategies.

To increase sales over time and build customer lifetime value, you must communicate with your customers on an ongoing basis. 

The secret to building a powerful brand is developing a relationship with customers that leads to brand loyalty and brand advocacy over time. 

Many companies give their customers an opportunity to talk through surveys and feedback forms, or at the end of a phone call by pushing one button to say what they think. 

But why don’t we give them the same consideration we give our employees? Why don’t we offer a way for them to interact with us at the time when they want to interact with us? Why don’t we give them the same Open Door policy we give our employees? Social Media has given every customer an “Open Door” to say whatever they want about your company on the internet. They can say you rock or you suck, or anything in between. Think about this in a positive and proactive way. 

What if you had a way where your customers could go directly to you first before they decided to talk to the internet and share it on social media? What if you had a specific mechanism to handle an Open Door policy with your customers, where they felt they could be heard directly by someone who could do something about their issues? Typically, an open door policy for your customers allows them the ability to go all the way to the top person if they desire to discuss their issues. 

It is an open door to air their concerns and frustrations. Good communication with your customers is about knowing their needs, active listening and building relationships. It also involves collecting feedback from your customers, giving them explicit answers to their technical questions and adapting communication channels to match their references. 

The world is changing rapidly, and so are customers’ expectations and desires. If you want customers to stick with your business, make your offer relevant to them. Ensure good communication with customers, and provide them with products or services that address their needs. It is important to have a competitive advantage that you can present to them. 

Increasing customer lifetime value is dependent on your ability to develop both long-term strategies and short-term tactics to implement those strategies. 

Test these tactics immediately to boost your customer lifetime value. Remember, a few companies are not investing enough in customer retention. That means your competitors probably are not investing adequately in customer lifetime value tactics, either. In other words, prioritising customer loyalty and retention gives you another way to get a jump on the competition. As a business owner, you don’t need to implement a huge affiliate programme. 

Just talk with other complementary businesses, and offer them a commission on every sale they make of your product. You might be surprised how many businesses you’ll find who are more than happy to take you up on the offer. 

Be sure to focus on relevant businesses and partners. They will only be successful with sales if their customer base is somewhat similar to your own target market in the first place.

In summary, customer lifetime value is a powerful metric that adds different perspectives to your customer experience strategy. As you can see, you’ve got a lot of options when it comes to referral tactics. 

Don’t be afraid to experiment and get creative. Compare the results of chosen tactics, mix them, adjust them and enjoy the long-term exponential growth.

 

*The opinions expressed in the article are that of the author alone, and are in no way linked to his employer or any affiliates.


2021-09-13  Staff Reporter

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