Customer lifetime value is one of the most complete marketing metrics available to us. Whether a global event has disrupted business or your customers are going through a collective event themselves, you need to track customer lifetime value (CLV) now more than ever.
Let’s take a look at six ways you can use CLV data to build your business during times of uncertainty and why you shouldn’t abandon this metric during a disruption.
Why CLV Matters During Disruption
Customer lifetime value is still a valuable metric even when the world is in transition, simply because it provides a long term valuation. Businesses must shift from short-term customers to nurturing long term ones.
Data-driven decision making will always lead to better results than trying to go with gut feeling alone. CLV allows businesses to determine how much to invest in current customers to help retain them, even in the middle of global disruption. This investment could drive innovative new customer policies and offerings to increase CLV.
For example, during COVID, brick and mortar stores experienced closures and reduced foot traffic. In an effort to support loyal customers, Target invested fully in contactless shopping experiences. Instead of panicking about reduced foot traffic in physical stores, Target facilitated an entirely new way of shopping and came out a winner.
Target’s understanding of CLV helped to drive this shift in policy. Target’s marketing efforts recognized that loyal customers would still shop at Target if given a robust alternative to visiting a store physically — i.e. if online purchases and contactless pickups were available.
6 Ways to Use CLV
A pandemic is the perfect time to nurture your highest priority customers, helping your business stabilize even during a disruption. Here are six ways you can leverage and maybe even increase CLV during uncertain times.
Manage relationships
Disruptions will create temporary gaps in engagement, but CLV helps you identify your high priority customers. While you can continue to allocate some resources to building relationships with new customers, it’s engagement that will bring your best customers back.
CleverTap’s mobile marketing system, for example, can help you use RFM to analyze which customer segment provides the highest value for your bottom line. You can nurture those relationships through the disruption with innovative offerings.
Create effective short-term goals
Your CLV can also help you figure out what to do in the short term wake of global disruption. For example, during COVID, customers had limited movements, leading to a sharp increase in online shopping. As inventory slowed, customers were increasingly frustrated with shopping experiences.
CLV could help you identify your best returning customers to inform them early of restocks or sales on essential items. The data from tracking customer lifetime value can help you determine which customers to target and how to facilitate and deliver value during a disruption.
Determine customer segmentation
Customer segmentation is vital during temporary disruption. Who can you focus on now versus who may be loyal long term? Even during normal operating conditions, failing to recognize the differences in your customers could be detrimental to business operations. During a crisis, the effects are compounded.
During a pandemic, companies must understand which areas are experiencing peak disruption versus those that have weathered and are on the mend. The marketing tactics may vary dramatically between these two groups.
Measure your compassion
Businesses must have compassion for customers during times of disruption. CLV could help companies make sustainable decisions. For example, businesses could offer to pause subscription services with no penalties for customers affected by the disruption.
Understanding your customer lifetime value can help you make a decision that temporarily halts revenue from specific customers to foster a healthier long term relationship. Customers who benefit from this decision might return once the disruption is over with a stronger loyalty than ever.
Factor in flexibility
Customer lifetime value can help a business gain a deep understanding of the ebbs and flows of customer behavior. Rather than make decisions in a panic, a business can use the data from CLV, marketing strategy, and other sources to craft a logical and thoughtful plan to help high-value customers make it through the disruption.
CleverTap’s comprehensive data dashboard, for example, can quickly help you determine your highest value customers. You’ll have the data at your fingertips to see the performance of your new initiatives and pivot as necessary.
Help sustain brand loyalty during a crisis
Pausing subscriptions with no penalty, offering incentives to long-term customers, and changing rewards programs to fit the current retail reality — all these moves help encourage a deeper relationship with a brand. Customer lifetime value can help show the long-term return for making temporary revenue-cutting decisions.
Leveraging CLV To Weather Disruption
You must understand customer lifetime value to gain deep insights into the different types of customers your business has. CleverTap has resources designed not only to increase engagement but also to provide the analytics companies need to make data-driven marketing decisions.
During a time of disruption, companies need compassion and a reliable set of tools to survive and thrive. CleverTap’s comprehensive marketing suite can help you take advantage of vital metrics like customer lifetime value and use them to nurture long term relationships.
You can use CleverTap’s suite of tools to optimize your customer lifecycle, segment your high-value customers, and increase CLV even during a disruption through behavioral analytics and individualization. It’s time to nurture your most valuable clients through any storm.