1 / 10

Maximizing Customer Lifetime Value

Understand the concept of Customer Relationship Management (CRM) and how it helps to maximize customer loyalty, profitability, and equity. Learn about CRM framework, strategies for retention, and the importance of database marketing. Discover key concepts and the Customer Development Process.

kwein
Download Presentation

Maximizing Customer Lifetime Value

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Maximizing Customer Lifetime Value Customer Profitability Customer Equity Lifetime Value

  2. Estimating Lifetime Value • Annual customer revenue: $500 • Average number of loyal years: 20 • Company profit margin: 10 • Customer lifetime value: $1000

  3. What is Customer Relationship Management? CRM is the process of carefully managing detailed information about individual customers and all customer touchpoints to maximize customer loyalty.

  4. Framework for CRM Identify prospects and customers Differentiate customers by needs and value to company Interact to improve knowledge Customize for each customer

  5. CRM Strategies Reduce the rate of defection Increase longevity Enhance “share of wallet” Terminate low-profit customers Focus more effort on high-profit customers

  6. Customer Retention • Acquisition of customers can cost five times more than retaining current customers. • The average customer loses 10% of its customers each year. • A 5% reduction to the customer defection rate can increase profits by 25% to 85%. • The customer profit rate increases over the life of a retained customer.

  7. Figure 5.5 The Customer Development Process Suspects Prospects Disqualified First-time customers Repeat customers Clients Members Partners Ex-customers

  8. Creating Customer Evangelists

  9. Customer database Database marketing Mailing list Business database Data warehouse Data mining Database Key Concepts

  10. Using the Database To identify prospects To target offers To deepen loyalty To reactivate customers To avoid mistakes

More Related