Laktionova Natalia "Calculation and management of customer lifetime value (CLV). Do companies really use CLV only for marketing purposes?"

It’s quite obvious that in a modern digital savvy world only companies which can work with customers data can keep up with their competitors. What is the TOP of mind thing which comes to you when you think about Customer Lifetime Value (CLV)? To me it’s PROFIT or MARKETING. Mostly we tend to thing, that CLV is related to loyalty, profit calculation and return on marketing. However, the approach to use CLV differs within different industries. Let’s take a look at some industries which use CLV studies mostly for giving out money. 

1. Medicine 

For example in medicine during Board members meetings directors plan a certain health programs, they consider a CLV as a resource for strategic planning since each customer depending on his/her lifetime value deserves different treatment. Imagine a 16 year s old boy, who is a heavy smoker and a 80 years old smoker. Most likely, the government would do it’s best to save up from becoming a smoker the first patient rather than the second one. Consequently, the government would give an extra money to funds to promote healthy lifestyle or health programs (Robert W Palmatier, Shrihari Sridhar, 2017)[1][2]

2. Charity companies

CLV ultimate goal can be divided in two: make a person give more or make a person give longer.  Thus, if your company for example deals with blood donors, their idea is to keep each donor with them because if he only comes once, his blood will be useless and the funds invested in taking his blood will be money down the drain . Consequently, each company invest more money in making donors come again rather than just come[3]. Interestingly that in different countries they have different policy for blood donor to reduce donors retention: in Russian Federation they give you a two days off and a cash while in USA donors do not get anything. 

3. HR Management

The longer employee stays with a company, the stronger this company will be. That’s of no use to invest in education and adoption of an employee and in a short period of time watch him leave. That’s why the best HR companies not only find technically perfect candidate but also check if he/she matches a company values and rhythm. Moreover, companies are ready to pay an extra money to good HR managers to analyze employee flow and minimize it[4]. Thus, CLV is not a monetization tool in this case as well. 

Hopefully, this short post made you think differently in terms of CLV usage. 

Sources:


[1]“Marketing Strategy. Based on First Principles and Data Analytics”, Robert W Palmatier, Shrihari Sridhar, 2017

[2]“Customer Lifetime Value: How to Calculate It for High LTV Medical Practices & Why It Matters”, 2017, URL: https://www.closerscafe.com/why-customer-lifetime-value-matters-to-medical-practices/

[3]“Measuring Lifetime Value in Your Non Profit CRM”, Mckenna Bailey URL: https://www.virtuouscrm.com/blog/marketing/measuring-lifetime-value-non-profit-crm/

[4]“Effective HR Management in the Union Environment (Clv Reports)” Jamie Knight, 2017

Капустина Анастасия: «Расчет и управление ценностью клиентов»

Customer LifeTime Value (CLV, или часто его называют CLTV) — пожизненная стоимость клиента — это прибыль компании, которую приносит клиент за все время сотрудничества с ним.

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