As an online seller, you often spend a significant amount of time sifting through multiple metrics to help make sound business decisions. But what if we told you there was one metric to rule them all? Customer lifetime value – the value you can use to strategically choose your future marketing initiatives, make better sales decisions, and increase your bottom line.
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What is Customer Lifespan Value (CLV)?
Customer Lifetime Value (CLV) relates to the amount of money a customer will bring to your brand over time as a paying customer.
For example, if you have a customer Latest Mailing Database who continues to buy your products for 12 months spending $30 each month, his CLV is $360 and is still subject to change if the customer decides to continue buying your products throughout the next year. Why Should You Care About Your Customer’s Lifetime Value? Customer Lifetime Value (CLV) first became prominent in the software business, but is quickly making its mark in eCommerce as well. Here are reasons to know your CLV is good for your online business:
You can also use your CLV to identify the best paying customers and then create a customer acquisition strategy that targets people with different backgrounds and personas so that you qualify the customers who can make the most money.
It Tells You How Much You Should Spend On Customer Acquisition
Therefore, Customer acquisition refers to the progress or tactics you employ to bring in new customers or convince people to buy your products. In eCommerce, customer acquisition can mean sponsored search, organic search, banner ads, video ads, social media ads, email marketing or affiliate marketing.
Knowing the CLV helps you be strategic in estimating how much to spend on customer acquisition so that you attract customers who are more likely to make repeat purchases.
You will be able to segment your customers BJB Directory by value By knowing which customer groups bring the most profit to your business, you can find ways to retain them by sending special offers or sending gifts to these VIP customers.