Understanding Customer Lifetime Value
Customer lifetime value is an important concept to understand from a marketing standpoint. The cost of obtaining a customer and gaining that first sale is often much higher than the costs of maintaining the relationship with the customer. Long term thinking like this can increase your marketing options and will give you a better chance of succeeding as a company. The short video below gives some additional explanation of lifetime customer value. The accent of the narrator alone makes the video worth watching.
Can you think of an instance a company spent a lot of money or put in a lot of effort to gain you as a customer? What types of marketing activities did that company use to get your attention? Did that effort result in additional sales and a long term relationship? Do you think the initial investment of their time and money was worthwhile?’