Should I invest more money into customer experience (CX), customer support, or customer success right now?.What resource investment will have the most impact on customer health and revenue growth?.I don’t know a single company that hasn’t pondered these questions: Part 1: Making the case for Customer Lifetime Value as the key metric for your customer experience strategy And we’re going to explain how it all works, and how you can start using it to get better ROI for your business right now. If you want to know how to maximize your bottomline, then improving Customer Lifetime Value is key. This is the magic we’re going to unlock for you in this comprehensive article. They’re out there warming up leads and sending them to you, so you don’t have to pay to find them. In a sense, they become your virtual sales army. Those end users who are sticking with you are buying more from you (cross-sells and upsells) and they’re telling their friends and colleagues how great you are (referrals). It is the ideal way to tie customer loyalty to revenue. And that’s where customer lifetime value comes in as a business case. While many SaaS companies are still largely concentrated on acquisition-based growth through demos and trials, we’re seeing a shift to focus on the end-user and the metrics that capture how happy they are, because those end-users lead growth. We are also at an inflection point with SaaS. It becomes less expensive to acquire new customers, and the revenue pours in exponentially. Because when you go after customer lifetime value with intention, making it one of your “North Star” metrics, you’ll find that the cost-to-acquire actually shrinks. ![]() ![]() The goal is to make the revenue-over-time from each individual customer as high as possible.īut the technical definition doesn’t cover the magic that’s actually in customer lifetime value – as a metric and as a mission for a digital marketplace, an e-commerce site, and SaaS businesses. It’s an equation that subtracts the cost to acquire a new customer (CAC) from the total revenue from that customer. The technical definition of Customer Lifetime Value (CLV) is the revenue earned from a single customer over time.
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