Customer value
Posted: Wed Jan 22, 2025 10:41 am
This is a mistake that many new businessmen make: they constantly work on attracting an audience and improving the product, but forget about the need to build customer value by building relationships with them. As a result, the costs of attracting one client do not pay off with the funds that come from him.
Why is it necessary to calculate LTV?
You can move purposefully towards list of mobile phone numbers database success by focusing on the channels that bring in the most valuable customers.
Information on the effectiveness of different channels will help you correctly allocate your budget based on your needs.
It will be possible to assess the value of different customer groups over the long term.
You will be able to assess savings points, as well as understand how much money can be additionally spent on customer acquisition and retention activities (for example, through remarketing, email newsletters, or social media promotion).
There are several formulas for determining customer value, designed to be used in different situations. In general, the formula looks like this:
LTV = S x C x P xt , where
S is the average check size among all customers,
C — average number of purchases per month,
P — profitability as a percentage of the check amount,
t — average time of cooperation (how many months clients make purchases/number of these clients).
Customer value
It is worth tracking the dynamics of customer value, comparing the value of this indicator in different periods. You can also see what level of LTV your competitors are at or study research on your market segment.
A high customer value is a sign that the customer can buy more products of different types from you, as well as participate in its promotion. It can be said that working on LTV contributes to the emergence of regular customers who will recommend your company to all their friends.
Why is it necessary to calculate LTV?
You can move purposefully towards list of mobile phone numbers database success by focusing on the channels that bring in the most valuable customers.
Information on the effectiveness of different channels will help you correctly allocate your budget based on your needs.
It will be possible to assess the value of different customer groups over the long term.
You will be able to assess savings points, as well as understand how much money can be additionally spent on customer acquisition and retention activities (for example, through remarketing, email newsletters, or social media promotion).
There are several formulas for determining customer value, designed to be used in different situations. In general, the formula looks like this:
LTV = S x C x P xt , where
S is the average check size among all customers,
C — average number of purchases per month,
P — profitability as a percentage of the check amount,
t — average time of cooperation (how many months clients make purchases/number of these clients).
Customer value
It is worth tracking the dynamics of customer value, comparing the value of this indicator in different periods. You can also see what level of LTV your competitors are at or study research on your market segment.
A high customer value is a sign that the customer can buy more products of different types from you, as well as participate in its promotion. It can be said that working on LTV contributes to the emergence of regular customers who will recommend your company to all their friends.