Customer Value

What is customer value?

A relatively new marketing concept, the concept of customer value or lifetime value consists of evaluating the purchasing and evolution potential (tastes, interests, etc.) as well as the risk presented by each customer with a view to developing the performance of marketing actions.

Notions and keywords associated with customer value

ROI, lifetime value, attrition, return

Customer value: how does it work?

The estimate of the customer value is based on the projected turnover made with each customer or customer segment. It gives an estimate of the profitability of the marketing investments made for each of them over time. The customer value thus makes it possible to optimize the investments by concentrating the efforts of the advertiser only on the most profitable customers and/or to develop the profitability of a customer by participating in the increase of its rate of equipment and food. This indication also has a predictive value in terms of risks: the customer value makes it possible to estimate the risk of unpaid invoices, cancellation of subscription, the changeover to competition …, and to deploy the marketing actions accordingly.

Profits and benefits of customer value

A true decision-making tool, customer value enables the advertiser to make the best strategic choices: manage the attrition rate, optimize the targeting of marketing actions by defining a target audience, control the costs of the actions marketing and increase its performance.

How to estimate and increase customer value?

The customer value refers to the profit that can bring the medium to long term the same customer to your business. This includes the real value and potential value of a consumer. Any organization has its perfect customer, the question is: how to identify and profit from his relationship with him throughout the customer lifecycle?

As you can see, not all your clients are of equivalent profitability. Some will have a greater chance of generating profit for your organization, while others will cost you more than they actually earn.

Identify your most profitable segments and create value

First, it’s about understanding what’s generating value for your consumers. This can be done through questionnaires, and/or satisfaction surveys, leaving them with a field of expression that is sufficiently free to collect accurate feedback and comments. The idea is to understand the characteristics that, in their eyes, make you more attractive than the competition. Is this your geographical location? Attractive price ranges? A process of manufacturing products more responsible? An additional service? …

Keep in mind that it is necessary to maintain the dialogue with its consumers if one intends to build a relationship of trust in the long term. A “win-win” relationship will only be possible with transparency between the message and the actions, and an effective response to customer needs. A consumer dissatisfied with the fact, so be vigilant and responsive in the management of the customer relationship.

The next step in building customer value is intelligently enriching your database and then leveraging it to build an “ideal” consumer profile that is key to your business. 90% of organizations enrich their contact data, and most with geographic, demographic, and professional information. Thanks to a sound database enriched with this third-party information, as well as through powerful segmentation tools, marketers are able to deepen their customer knowledge. This will enable the implementation of a sophisticated marketing strategy to target high potential customers and focus investments on them.

Thus, you will enter into a special relationship with these key profiles, creating an experience that will theoretically lead to more commitment and interest from them. Similarly, focus your product innovation efforts on these segments: it will make you attractive to similar profiles, and you will potentially win new prospects.

And beware: this relationship with your key profiles needs to be constantly maintained. The customer enhancement is not limited to one-off marketing operations, we must build a strategy for the long term.


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