CLV

It has been around for more than four decades.

It helps in getting the value of a customer which he would be

giving to the organisation.

This concept is applied in many of the industries.

It is used in marketing to execute targeted campaigns focused n

high value customers
 CLV
It plays a pivotal role in steering the various marketing
efforts

It helps marketing team in cross selling and up selling

CLV also helps in developing a metric of customers

which are of high-value and also helps marketing team
to focus in investing in them.

It helps in identifying the 20% of the customers which

 How To Estimate CLV?
n

CLV = p t

t=1 ( 1 +d ) t

Where pt = profit at time t

d = Discount Rate
n = Time Period
What is Customer Lifetime?
Competitiveness of Industries

Nature of Products and Services

Life Stage of the Customer

Applying PLC to CLV

The value generated by a

customer across various phases
Effective campaigns to reduce
churns
Customer Acquisition
It helps in segmenting the customers based upon
demographics and behavioural similarities.

It helps in bringing right type of customers who can

create high value for the business.
Continued.
Integrating CLV With The
Organization
CASE STUDY
Leading insurance company improves customer retention
by leveraging customer value.
Business Challenges
Deliver a baseline current customer value measure for
motor policy customers.

Determine a customers lifetime value based on

marketing acquisition costs.

Gain a comprehensive view of the likelihood of an

individual to continue paying insurance premiums.
Value Based Strategy
 Business Benefits
The customer value was used as a metric to provide differentiated
customer offers in cross-selling campaigns.

The solution provided a view of the likelihood of an individual to

continue its relationship with the company and enabled focused
retention campaigns.

It helps the company to identify the potential future lifetime value of

its prospects.

It also helps in enhancing the customer lifetime value with the help of
social media.
Conclusion
It helps in acquiring, nurture and retain customers who
are more profitable and high-valued to the organization.

It helps in churning out the customers propensity.

Marketing team can focus on the high prospects

It also helps the company to know the customers in

whom they make the investments (acquisition cost) and
which customers to ignore.