Combining Customer Lifetime Value with other aspects of Customer Journey
We have defined an innovative approach to drive customer acquisition, retention and engagement strategy based on two factors. We create a model to identify customer’s lifetime value. And another model like propensity to purchase, likelihood of churn, measure of engagement level to combine two aspects of a customer’s journey:
Lifetime value: Measures a long term perspective of how valuable to customer is to the company in next 3-5 years or more.
Second Metric: Another model like propensity to purchase measures customer’s current situation for a near term prediction.
Combining these two parameters, a grid is created which puts each customer in a block as shown below. A complete marketing and customer service strategy can be driven based on this information. For example personalize landing page, call routing or discounting strategy.
Applicability of this methodology
This methodology can be applied to almost any company which serves B2C or B2B customers in high enough volume. The company can benefit tremendously from the systematic approach and a unified strategy to deal with customers across various departments and touchpoints.