What Makes A Business Make Profit : New Customers Or Returning Customers?
But there is the problem. According to an Econsultancy study only 42% of business say they know how to measure customer lifetime value (CLV).
What 's the Problem???
CLV is a very essential stat for marketers everywhere. How do most business make profit: new customers or returning customers?
For the majority of companies out there, the answer is returning customers. It 's hard to acquire new customers. It 's much cheaper to keep the ones that you have, to maintain relationships with customers who respect and appreciate your service.
So why are so many companies struggling to measure LTV. A lot of it comes down to company culture. The blog Umbel explains:
Why is LTV such a challenge for such a large percentage of companies? The Econsultancy report states it’s in large part because so many organizations are operating in disconnected silos and lacking in integration, making it difficult for them to manage LTV. As someone who runs a business that’s devoted to helping companies extract as much value as possible from all the customer data that’s available to them, that struck a chord with me. I truly understand how problematic silos can be, and believe that a unified, coherent approach to data and operations is an essential part of running a business. For companies that haven’t been successful in measuring LTV, maybe the key isn’t to think of the calculation as easy, but to think of it…