How do you align your organization and culture around CLV as a key metric?

1 Define and communicate CLV

The first step is to define what CLV means for your business and how you calculate it. You can use different methods, such as historical, predictive, or cohort-based, depending on your data availability and goals. You should also communicate the value and benefits of CLV to your stakeholders, teams, and employees, and explain how it relates to your vision, mission, and objectives. You can use dashboards, reports, and presentations to showcase CLV insights and trends, and highlight the impact of CLV on your key performance indicators (KPIs).

2 Align incentives and rewards

The second step is to align your incentives and rewards with CLV. You should design your compensation, recognition, and feedback systems to encourage and reward behaviors that increase CLV, such as acquiring, retaining, and upselling customers. You should also align your budget allocation and resource management with CLV, and prioritize investments that enhance customer value and loyalty. You can use CLV as a criterion for evaluating and rewarding your marketing, sales, service, and product teams, as well as your partners and vendors.

3 Foster collaboration and learning

The third step is to foster collaboration and learning across your organization around CLV. You should create a culture of customer-centricity, where everyone understands and empathizes with your customers' needs, preferences, and feedback. You should also create a culture of experimentation, where you test and learn from different strategies and tactics to improve CLV. You should facilitate cross-functional communication and cooperation, and share best practices and lessons learned from CLV initiatives. You can use tools, platforms, and processes that enable data sharing, analysis, and action.

4 Empower and engage customers

The fourth step is to empower and engage your customers around CLV. You should provide them with value-added services, content, and experiences that enhance their satisfaction and loyalty. You should also provide them with opportunities to co-create, customize, and influence your products and services, and to share their feedback and opinions. You should foster a sense of community and belonging among your customers, and leverage social proof, referrals, and advocacy to grow your customer base. You can use channels, platforms, and programs that enable customer interaction, participation, and contribution.

5 Monitor and optimize CLV

The fifth step is to monitor and optimize CLV over time. You should measure and track CLV at different levels, such as individual, segment, or cohort, and compare it with your benchmarks and goals. You should also identify and analyze the drivers and detractors of CLV, such as customer acquisition cost, retention rate, churn rate, average order value, frequency, or margin. You should continuously test and optimize your CLV strategies and tactics, and adapt to changing customer behavior and expectations. You can use tools, models, and frameworks that enable CLV measurement, analysis, and improvement.

6 Celebrate and celebrate CLV

The sixth step is to celebrate and celebrate CLV. You should acknowledge and appreciate your customers for their loyalty and value, and reward them with incentives, discounts, or perks. You should also acknowledge and appreciate your employees for their efforts and contributions to CLV, and celebrate their achievements and successes. You should showcase and share your CLV stories and results, and inspire others to follow your example. You can use events, campaigns, or media that enable customer and employee recognition, appreciation, and celebration.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?