Thursday, March 26, 2015

Retailing: Working With The Customer Lifetime Value

The Customer Lifetime Value is a key component of the whole customer relationship management concept. The main idea is that a customer value increase with the time it stays a customer. The longer the relationship go, the more sales and benefits you get.

It is difficult though to have clear data explaining the facts. Here I found, a great chart in an article about loyalty program in retailing. It shows how the profit per customers evolve through the time. It shows well the benefit to think about the customer life cycle. 

You can clearly see that the profits increase with the time dramatically. Therefore, you should pay attention to how you deal with your customers depending on if he is a prospect, a regular, or a loyal customer.

Source: Harvard Business School Working Knowledge