Customer Lifetime Value

A perfect way to insure a future growth in your business and your brand is by creating lifetime customers. Just as it sounds this is the creation and maintenance of customers along their lifespan in doing business with you, hence creating value well into the future.

This isn’t easy…actually I could even go ahead and say that it is quite hard and complicated. To be able to create a loyal customer who is willing to spend her bucks in you (and only you), is not an easy task and it must be very well planned out to be able to make them feel that way about you.

A perfect industry for the creation of CLV (customer lifetime value) is the automobile industry. According to some studies, adults in developed countries tend to change cars every 5 years. If we agree in that we come to the conclusion that every adult has around 10-12 cars in their lifetime. There is a huge opportunity here! We might ask ourselves, which of these buys hold the biggest importance? I’d say the first three. Let me explain…

The customer goes ahead and buys her first car, if she is very impressed by it (the car itself, but also all the lateral services that are offered), she might get ‘engaged’ with the brand right away. She won’t need any more convincing when she’s car-hunting 5 years later. If that wasn’t the case and she didn’t find it quite an enjoyable experience, she will change dealers the second time, and the third time. My guess is that by the third brand she gets around she will find it satisfying as she has enough past experience to compare it with. If car manufacturers and brands make an excellent  job in marketing and servicing their product (special emphasis in the post-service area), they can turn a traditional non-engaged consumer into a loyal one.