The Importance of CLM CRM and Lifetime Value in Marketing

What is Customer Lifetime Value?

If you are using a CLM CRM like ConvergeHub, you must be knowing that CLV (Customer Lifetime Value) which is also often referred to as LTV (Lifetime Value) is the predicted sum total of all future profits (or revenue) that an individual customer will generate for any particular business. 

Therefore, using an accurate estimate of LTV/CLV as the basis for strategic marketing decisions will in return maximize the company’s revenue.    

The key to success in CLM (Customer Lifecycle Management) lies in optimizing CLV and not metrics like Conversion Rate (CR) or Revenue per Visit (RPV).  

So, you can easily understand now that CLV trumps all other metrics for long-term profitability of any business that can be further optimized by using a CLM CRM solution, which provides a 360-degree view of the customers like ConvergeHub.

The Advantages of Utilizing CLV

We all know it is always easy to focus on the present, which is not often the best way to tap the full potential of each customer.

For an example, looking at the metrics such as Conversion Rates and the primary purchase values while ignoring the sustaining value of the consumers may mislead the marketers to invest money and time in finding “cheap and fleeting” customers (with smaller total revenue value). Without focusing on acquiring customers those who will deliver a perennial stream of income for years to come, while conserving the necessary resources that would be a complete waste on low-value customers.

Hence, when a company has a dependablemeans of predicting CLV, it can better manage its customer relationship using CLM CRM software, optimize necessary resources invested in holding back each customer, make the best use of marketing and customer retention strategies, and find accurate customer metrics for the growth of his organization.

In a gist, the goal and objective of using CLV while working with a CLM CRM platform are to concentrate on finding, nurturing and thereafter retaining those predicted long-term customers, which creates the most value for any business over a considerable stretch of time.

According to the 80/20 rule or the Pareto Principle, 20% of your customers represent 80% of your sales.

Therefore, a CLM CRM like ConvergeHub is the need of the hour for all businesses, looking for nurturing and retaining these 20% high yielding customers those that create the most value for businesses over a considerable period of time.

What are the other CLM CRM metrics needed for evaluating CLV?

• Size of the purchase value or transaction
• Cost of the customer service
• Response to marketing initiatives (e.g. email campaigns and others)
• Cost of customer acquisition/retention·  

Takeaway

Hence, to easily accelerate your marketing actions contact us or request for a free trial of 14-day to understand how you can use ConvergeHub CLM CRM solution to in order to convert more customers, increase the spending of the existing customers and therefore reduce customer churn.