Customers are more engaged with businesses than ever before. Through Facebook comments, Tweets, Yelp reviews and so on they have more opportunities and more channels for interacting with, and sharing their impressions than ever before. Businesses, in turn, must embrace this new level of engagement and interaction to meet and exceed customer expectations. Not on Facebook? Then those comments will fall on deaf ears and frustrate your audience. Not checking Yelp? Then negative reviews that go unaddressed will only continue to spread around bad word of mouth, however accurate or inaccurate it may be.
Businesses aren’t without the tools to rise to this challenge, though. Customer lifetime value (CLV) offers an approach to gauging customer interactions and growth, as well as the key drivers behind that growth. Building on these metrics with a confluence of social, marketing and transactional data on customer behavior, “real CLV” (rCLV) takes this a step further and can allow businesses to better hone their marketing and customer engagement efforts, creating more compelling and relevant interactions between the business and the customer. Stronger interactions can lead to enriched experiences, improved rCLV and the profitability that goes with it.
According to a recent survey conducted by Forrester Research and commissioned by Pitney Bowes, the majority of the 120 enterprise business officials polled see the value in both CLV and rCLV. They don’t need to be sold on it: CLV is already viewed as a strategy that can bolster customer acquisition and retention, while rCLV resonates as a solution that enhances the CLV formula to provide greater insights about when and how to engage with customers in the right way, at the right time, in order to best maximize the bottom line.
Does It Work?
That’s the magic question, isn’t it? When all is said and done, does the effort put into CLV actually pay off for real customers and real revenue? For the majority of businesses that take the time to integrate CLV into their customer engagement strategies, the answer to those questions is decidedly yes.
Nearly three-quarters of the businesses asked in the Forrester Research survey said that they use CLV as part of their customer acquisition and retention models – and that same number of businesses added that they’ve seen customer engagement improve because of it. Meanwhile, about two-thirds noted that utilizing CLV tactics has helped them to improve acquisition, retention and overall customer loyalty.
The Caveat of CLV
That said, adopting CLV strategies isn’t like pressing a button. As the survey reveals, pain points include: how best to turn CLV insights into actionable decisions; building a reliable set of data necessary for CLV monitoring; and finding which moments to capitalize on in the customer journey that would improve both engagement and profitability. These missed opportunities signify that in spite of their growing recognition to burst out of the old ways and adopt fresh strategies for customer engagement and marketing, many businesses are still struggling with the how, when and where of best utilizing CLV.
To alleviate these struggles, companies need to focus on drawing in – and reconciling – data from multiple sources; assigning correct cost amounts to a customer journey in order to better ascertain the true value of CLV; and implementing real-time tracking for CLV metrics in order to better determine the effectiveness of CLV methods on the sales cycle.
Getting Real about CLV
That’s exactly where rCLV steps in: eliminating the distinctions between behavioral and transactional customer data, so that businesses can better extrapolate the full value of a customer. This more comprehensive and customer-centric view allows for deeper insights, derived in real-time, for dynamic customer interactions and improved engagement efforts – all of which feeds into long-lasting customer retention and value.
Are you interested in learning more about the obstacles that businesses face in adopting rCLV as part of engagement strategies, and what makes rCLV ultimately worthwhile? Our new whitepaper, “Making Customer Lifetime Value Real,” highlights the roadblocks, how to overcome them and the net benefits that rCLV can bring to your customer engagement and marketing efforts.