A lot of the early work on customer lifetime value (CLV) comes from the world of direct marketing. This makes sense given an obvious use of CLV is to manage a customer base. Using CLV you can help decide who to try and acquire, what your retention efforts should be, and who might be good…
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Customer Centricity And CLV
Peter Fader is a major figure in the study of customers. Specifically, he is closely linked to the idea of how companies value customers and focus on serving the customers that are most important to the firm. His 2019 book with Sarah E. Toms, The Customer Centricity Playbook, looks at customer centricity and CLV. The…
How To Use, And Misuse, Customer Lifetime Value (CLV)
Or, You Could Do It That Way But Why Would You Do That? Customer Lifetime Value (CLV) is a very useful metric. (Technically, prediction/estimate I guess). It is the dollar value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. That said, it has to be…
Simple Marketing Metrics Good. Too Simple CLV Not So Good
Let me start this post by saying that I have had good experiences with Qualtrics. I have used their survey panel services before, and would certainly do so again. (Assuming they want me as a customer after this blog post). Unfortunately their attempt to give advice on CLV is, let me use a technical British…
What Is CLV For? Knowing Helps Decisions About CLV
Customer Lifetime Value is an important metric and it has potential to be valuable in running a wide range of companies. One thing that is useful with any approach is to say what is it for? So what is CLV for? This seems like too simple a question to be valuable but often that isn’t…
Don’t Use One Industry To Create Examples For CLV (Customer Lifetime Value)
Lloyd Melnick has a short and snappy book on customer lifetime value (which he terms LTV). At its best this is a useful insight into the games industry. There is a lot of detail there in a very easy to read form. For example, you will learn about ARPU (Average Revenue per User) and ARPDAU…
More On CLV: A Lot Of Bad Advice Out There
Customer Lifetime Value (CLV) is widely discussed in marketing. Unfortunately, given marketers rarely refer to anyone else’s ideas this just leads to lots of people having their own view. This means when one looks up CLV online you are very likely to get a view of the metric that may, or may not, make sense. You want more on…
Teaching CLV Badly
Ex-Ivey PHD student and now University of Calgary professor, Charan Bagga, and I have just published an article. This focused on the teaching of CLV (Customer Lifetime Value). We surveyed the state of case-based teaching materials related to CLV and found them a pretty shoddy bunch. Teaching CLV badly seems to be the default way to teach…
What Is Wrong With This CLV Formula?
Peter Fader and Bruce Hardie are experts in understanding the value of customer relationships. They have offered advice on problems with CLV calculations, especially those taught in MBA programs. They ask: “What’s Wrong With This CLV Formula?” Five Issues They outline five issues. Many of these are things to bear in mind that we might…
CLV In The CPG Industry
V Kumar (the editor of the Journal of Marketing) and student Sarang Sunder have undertaken a review of the use, and potential use, of Customer Lifetime Value, CLV in the CPG industry. (CPG being consumer packaged goods, think P&G, General Mills). Challenges For CPG Marketers The authors talk about the problems that CPG marketers face…