If your account reps could sell more, marketing could target better, and customer service was more responsive to key accounts, life would be great, wouldn't it? It may not be as hard as you think using CLV with Microsoft Dynamics 365/ CRM.
You’ve probably heard that it costs less to keep and grow an existing customer than to acquire a new one. And it’s true. But, for many organizations this truism seems to have fallen on deaf ears, as companies still spend a large amount of their time and resources on chasing after new, potential clients. Even then, their efforts can be fragmented and the results less than desirable. This is hard to understand because keeping and growing current customers, and finding new ones like them does not have to be hard.
One of the most important ways for sales and marketing to focus on the right customers and right prospects is to understand the long-term financial value of a customer, via the Customer Lifetime Value (CLV) method. By knowing a customer’s value over their life cycle, an organization can: (1) identify their best customers; (2) better understand the value to more effectively serve customers; (3) know the value of increasing customer retention; (4) increase customer share; and (5) improve net profits.
To achieve the benefits of CLV, three elements must be in place: (1) data for customer purchases by product sector; (2) a solid CRM (Customer Relationship Management) system where customer relationships are effectively managed across marketing, sales, and customer service; and (3) defined processes where data is combined with CRM to drive better decisions across the organization; account reps, marketing, service, and managers for time spent with customers and prospects.
In the InfoGrow white paper, Why You Should Care About CLV, we discuss what goes into building a Customer Lifetime Value score for each of your customers, how to collect and use your data within Dynamics CRM, how to find out who your best customers are, while targeting your next best customers. With Dynamics CRM you can easily manage the information and the sales process for effectively working with customer and prospect relationships. CRM provides the right information, at the right place, and at the right time, for informed business decisions.
With solid process management, your customer data becomes a strategic asset to the organization to guide the marketing and sales teams. Better decisions on where to spend one’s time should translate to extracting more value from your customer base, which yields increased revenue and profit.
It is said that 80% of profits can be attributed to 20% of profitable customers, and 80% of the costs are produced by the top 20% of unprofitable customers. With Customer Lifetime Value and Microsoft Dynamics CRM, you will be spending money more productively to find, keep, and upsell the right customers.