The concept is simple. If your business spends time and money acquiring a new customer isn't it worthwhile to look at the value of that customer as a repeat customer?
Yeap. Sure is. Netflix subscriptions are the perfect way to look at it. That customer isn't worth the $10 they pay the first month. Their lifetime of paying that $10, then $12, etc. is the real value of that customer. Payments providers work to that by providing Automatic Updater services so when your customer forgets they have a new CC the subscription service finds it for them.
There is a great write-up over with ClickZ on this subject that really lays it all out for you:
https://www.clickz.com/how-to-calculate-customer-lifetime-value-cltv-the-complete-guide/228128/
Here is a snippet from the piece:
Customer Lifetime Value (CLTV) allows marketers to predict how much revenue customers will generate for their business for the duration of their relationship.
It is increasingly a data-led estimation and a key metric of business health. CLTV helps marketers understand how much each individual customer is worth to them. It also shows how much can be spent to acquire new customers while ensuring return on investment (ROI).
Forrester has been writing on the subject for a while now as we look to take the lessons of the B2C world and apply them in B2B.
Happy Reading,
J.W. Gant
It is increasingly a data-led estimation and a key metric of business health. CLTV helps marketers understand how much each individual customer is worth to them. It also shows how much can be spent to acquire new customers while ensuring return on investment (ROI).
Forrester has been writing on the subject for a while now as we look to take the lessons of the B2C world and apply them in B2B.
Happy Reading,
J.W. Gant
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