Customer Lifetime Value Analysis is the value of a customer over the entire length of time they are your customer.  It is much more complex than just net profit on sales.  And it can be used to help you make many marketing and structural decisions.

Say, you want to know how much your customers are actually worth to you, from the standpoint of both past purchases and potential future purchases.  You have a feeling that some of your customers are costing you as much to maintain as you are making in profits from those customers’ purchases, and you need help to either prove or disprove that “gut feel”.

By looking beyond the obvious (net profit on sales over the life of a customer) and finding the hidden factors that sap profits and make some customers more expensive to maintain than others, you would able to:

Determine the true LifeTime Value of  your customers Determine your potential future profits from existing customers Determine the true cost of maintaining a customer Make adjustments to certain processes to reduce costs Adjust your sales representatives’ call frequencies to allow more time for the more profitable customers and prospects Create programs to reward your most valuable customers so they will remain loyal. Determine the cost of acquiring and maintaining a new customer Adjust your marketing campaigns to target prospects with the same profile as your most profitable customers.

You would also discover some customers that have a negative LifeTime Value, meaning that you would actually be more profitable if you eliminated these customers, and avoided acquiring more like them.

InfoGrow will walk you through this process. Our goal is to teach your support team “how to fish” as we knowledge share a process that fits your objectives.