How do you measure customer lifetime value (CLV) and why is it important for customer service?

2 Why is CLV important for customer service

Customer Lifetime Value (CLV) is an important metric for customer service, as it helps you segment customers based on their value and tailor your service accordingly. Knowing your CLV allows you to prioritize your most valuable customers for loyalty programs, rewards, and personalized service. Additionally, you can reduce the cost of serving your least valuable customers or try to increase their value through cross-selling, upselling, or referrals. Furthermore, you can target potential customers with the right marketing and sales messages to convert them into loyal customers. CLV also helps you allocate customer service resources and budget more efficiently and effectively, as well as measure the impact of your customer service efforts on customer retention and profitability.

3 How to improve your CLV with customer service

Customer service is a major factor that can influence your CLV. By providing excellent customer service, you can increase customer satisfaction, loyalty, and advocacy, which can lead to increased revenue, reduced costs, and improved retention. To improve your CLV with customer service, you should strive to deliver consistent and reliable service across all channels and touchpoints, anticipate and exceed customer expectations and needs, solicit and act on customer feedback and suggestions, resolve customer issues and complaints quickly and effectively, provide value-added services and solutions that enhance the customer experience, reward loyal customers with incentives, discounts, and recognition, and encourage customers to refer others and spread positive word-of-mouth.

5 How to benchmark your CLV against your competitors

To benchmark your CLV against your competitors, you need to compare your CLV and related metrics with those of your industry or market. You can use various sources and methods to do this, such as industry reports and studies that provide average or benchmark values for CLV and other metrics for different sectors and segments. Additionally, competitive analysis and research can identify and evaluate your direct and indirect competitors and their customer service strategies and practices. Mystery shopping and customer interviews can assess your competitors' customer service from the customer perspective and reveal their strengths and weaknesses. Lastly, SWOT analysis and gap analysis can compare your CLV and customer service performance with your competitors' and identify your opportunities and threats.