CLTV Analysis
Invest in what is truly important
CLTV or Customer Lifetime Value is a metric that helps optimize your company’s resources. It achieves this by making a forecast of the net economic benefits that a certain client will bring you during a period of time.
UNDERSTAND THE VALUE YOUR CUSTOMERS HAVE
What is CLTV?
It is already known that loyal customers are the ones that bring the greatest profitability to a company. However, it is difficult to predict which consumers of your brand will be the most profitable.
The CLTV allows you to allocate your resources to those clients that have the greatest value for your company. Thus, it analyzes consumer loyalty, the income that it will contribute to the brand and the duration of its commercial relationship with it.
INVEST IN THOSE WHO REALLY MATTER
The importance of CLTV for your business
CLTV prevents you from wasting your resources on a client that will bring you little benefit. Blind investments are dangerous as they can lead to serious losses. The Customer Lifetime Value optimizes your resources so that you invest in what really matters.
This metric helps improve your ROI with a minimal margin of error. Thus, you will be able to design strategies to improve engagement in a personalized way, creating customized loyalty programs.
The result is an increase in income and a decrease in expenses.
A DIFFERENT REALITY FOR EACH BRAND
How to calculate the CLTV?
Within the calculation to obtain the Customer Lifetime Value, each brand uses a personalized formula that adapts to its financial reality.
However, all these formulas share a common calculation: the sum of the income that a client will generate during a specific period of time, minus the costs that the company has invested in that client. The result is the net value that the consumer has for your brand.
SPEND SMARTLY
What decisions can you make when you get to know CLTV?
The main objective of knowing the Customer Lifetime Value is to be able to know in advance the value that a customer will have for your business, thus deciding what cost to invest in their acquisition.
Knowing the CLTV you will avoid a negative value, in which the investment is greater than the benefit obtained. In addition, you will be able to better understand the value that each segment of your consumers has for your business, focusing your resources on those that are most advantageous.
Give importance to those who give it to you and reduce your expenses
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