In today’s world, there is more to business than just closing a sale, or converting a prospect. You need to be building long term mutually beneficial relationships with your customers, with the ultimate goal to achieve a higher customer lifetime value.
Customer lifetime value (CLV), represents the total amount of money a customer is expected to spend with your business, or on your products, during their lifetime (customer lifecycle). This is an important figure to know because it helps you make decisions about how much money to invest in acquiring new customers and retaining existing ones. – Shopify
The customer lifecycle is defined as each step taken by a customer as they flow through your sales funnel. This shows how a customer moves through marketing, sales and into customer service. Your customer lifecycle provides the opportunity to find areas of improvement to ensure higher customer satisfaction.
Here is a handy infographic to help you calculate your customer lifetime value:
Imagine you are driving a ton of traffic to your website but there are no conversions. Your customer lifecycle provides the perfect opportunity to see why this could be happening. If you notice a large customer drop off after the education stage of your customer lifecycle, then you know to possibly relook how you educate your customers on your product or service.
By monitoring your customer lifecycle you can pinpoint areas in your sales process that need to be improved. By doing this you can improve the customer experience and ultimately build a higher customer lifetime value.
In conclusion, you want to deeply understand your customer lifecycle so that you can find ways to improve your sales process and develop mutually beneficial long-lasting relationships with your customers.
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