Customer lifetime value a conundrum to most companies - reportby
The good news here is that the notion of customer lifetime value (CLV) is finally getting the recognition it’s been craving from British brands, over three quarters of which now recognise the significance of CLV to their organisation.
The bad news is that they’re failing to actually do anything about it. In fact, only 11% 'strongly agree' that they are able to accurately measure CLV, and therefore effectively build on it.
Based on a survey of 500 brand and agency marketers working in 11 different industries, a new report by Sitecore - ‘Customer Lifetime Value: Building Loyalty and Driving Revenue in the Digital Age’ - demonstrates that while understanding of CVL has improved, managing it is seen as something of a headache.
Getting tactical, the report highlights the need to improve the customer experience in order to develop CLV, with personalisation a key strategy for this, with a third of respondents placing it in their top three CLV-boosting methods. Also crucial is optimising digital – something that 50% are concentrating on.
The report notes that in the past, poor sector conditions and the commoditisation of products have been held accountable for low CLV. However, Sitecore’s findings show that marketing can counter the effect of these issues by stimulating the consumer’s sense of loyalty. This is clear to see when looking at the results from the retail and charity sectors where switching brands is pretty effortless; both have still managed to build customer bases which are more loyal than not.
The real blame, according to the respondents, lies with the siloed nature of their organisations and its incoherent marketing approach (35%), as well as with poor, unintegrated systems (34%). Luckily though, resolving these issues is on the to-do list of many organisations, with 66% of companies and 58% of agencies prioritising the formation of a connected customer experience which will, in turn, drive CLV.
Shawn Cabral, marketing director for Sitecore UK, comments: “The research reveals that brands recognise the importance of delivering a great customer experience, but they must re-define the meaning of customer experience to embrace every interaction with their brand. To provide this holistic experience, it is not just about technology, but also being able to be ‘multichannel’ within an organisation. All departments company-wide must ensure that they use their data and customer insight to collect, connect and predict – so they deliver an exceptional customer experience.”