Hey, I’m Tien and I write about my experience growing up into a better human being, one breath at.a.time.
Acquiring a new customer costs an arm and a leg.
In retail merchants, such cost increases by at least 222%, from 9$ per new customer in 2013 to 29$ in 2022 (1).
The situation is even worse in innovative businesses that aim to solve novel problems. You must educate the market about their own needs unknown to them before you come around.
How long could you wait until they are educated well enough to start taking back your money from them? Or when a competitor enters the game?
Enter ▶️ CUSTOMER LIFETIME VALUE (CLV)
CLV is a customer metric that indicates the total worth of a customer over the whole period of their relationship with the brand. It takes into account not only historic transactions but also future revenues that a customer brings to a business. CLV is a useful metric for tracking business growth.
This simple concept could save you from gigantic expenses on digital marketing and advertising.
CLV could benefit you in at least 03 ways:
Anticipate customer behaviors and needs, enabling better engagement and retention.
Make informed decisions about resource allocation and investment.
Maximize profits by identifying high-value customers and offering tailored products and services.
Taken together, the CLV mindset allows you to spend more time enjoying the creative process of product development and less time worrying about the vicious cycle of unprofitable sales.
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Note: (1) Brands Losing a Record $29 for Each New Customer Acquired