Customer lifetime value (CLV) can be defined as the total worth of any given customer to the business in question over the entirety of his or her relationship. Yet, while this success metric has become an essential element for gauging the health of an organization, as it directly relates to customer loyalty and revenue growth, few brands find themselves able to measure and quantify CLV within the context of their organizations. Companies recognize CLV's significance, but most fail to offer the holistic customer experience necessary to increase and strengthen their impact on the customer.
The "Customer Lifetime Value: Building Loyalty and Driving Revenue in the Digital Age" report explores the trends that are hindering the average company's ability to measure and increase CLV. Conducted by Econsultancy in partnership with Sitecore, this study polled nearly 900 respondents to determine how companies embrace customer interactions across all touchpoints and how their current strategies could be preventing them from developing their omnichannel approaches to customer experience. Because consumers typically interact with brands long before their first purchase, most companies must reevaluate how they address the customer journey.
The following statistics examine where companies currently stand on their path toward improved CLV and the factors that will drive improvements in the future:
- Eighty-nine percent of those polled believe that a great customer experience is an integral requirement for driving brand loyalty, which stands as the central pillar for sustainable CLV.
- While 76 percent of respondents either somewhat agree (25 percent) or strongly agree (51 percent) that customer lifetime value is an important concept for their organization, only 11 percent strongly agree that they are able to measure CLV.
- Thirty-five percent of those surveyed believe that the siloed nature of the organization and their lack of coherent marketing act as the primary factors hindering their ability to increase CLV, while 34 percent feel that poor systems or lack of integration hinder their progress the most.
- Though 57 percent of companies understand the key physical or offline touchpoints within the customer lifecycle, and 55 percent understand the key digital touchpoints within the customer lifecycle, 42 percent still admit that they are unable to measure CLV.
- Overall, respondents claim the four most effective tools for enhancing CLV today are the single customer view (32 percent), customer experience management solutions and platforms (28 percent), a dedicated retention team (27 percent), and stronger interactions between online and offline channels (27 percent).
- In the future, respondents believe improved customer experience (64 percent), better use of data (52 percent), increased personalization (50 percent), and better customer insight (50 percent) will drive their ability to increase CLV.
Key takeaway: Though companies understand the importance behind delivering consistently great customer experiences, they must also work to redefine the meaning of the customer experience as they work to embrace all interactions across channels. However, offering such holistic experiences doesn't solely depend upon technology, for companies must develop cross-departmental synergies in order to make sure all areas of the organization are empowered to carry out this vision. For instance, tablet experience (15 percent), self-service tools (17 percent), and social media (19 percent) aren't high priorities because, while companies acknowledge that siloed strategies are ineffective, most feel the need to focus on core channel competencies before managing multiple device interactions in greater detail. Ultimately, to increase customer lifetime value, companies must first improve their internal operations.