Organizations with large portfolios of customers that want to succeed in the competition in saturated markets, must understand the drivers as well as the current lifetime value of their customers and actively implement innovations that increase customer lifetime value (CLV).
We help organizations to effectively work with customer lifetime value via set-up or optimization of Customer Value Management processes or the fine tuning of PtB and other statistical models.
Customer Value Management Concept
Customer Value Management targets to get the highest possible Customer Lifetime Value (CLV). The idea behind CLV is to look at the client portfolio from a behavioral perspective and find out, what attributes are changing the customer value.
Standard key customer value management drivers are the following:
In the portfolio, there are several behavior groups which are usually similar in terms of profitability. Organizations can then look at interactions between the groups. PtB models or NBO selection should support the most profitable transitions. Retention actions need to support the transitions with the highest losses.
Such an approach is different from today’s standard management. One has to realize that it is not the product which drives the portfolio x-sell revenue, but the most profitable segment transitions. Such a difference has an impact on how x-sell is organized and motivated.
We can take it even a step further and create an index, by which the whole portfolio can be measured. The index shows the % gap between the ideal value of the portfolio (or even individual) and the current status.
ABC experts can help you to perform such an analysis tailored to your specific business needs.
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