About 3 in 4 global company marketers agree that customer lifetime value (CLV) is an important concept for their organization, according to a new report from Econsultancy and Sitecore. As part of the study, marketers were asked to identify the tactics and strategies that have been found most effective for enhancing CLV to-date, along with the most effective tools for today and tomorrow.
According to company respondents, the most effective tactic to-date for increasing CLV has been improvement to customer services (42% citing as a top-3 tactic), with personalized interactions (34%), cross-selling/up-selling (29%), more effective use of data (26%) and customer segmentation/personas (24%) also in the mix. Fewer (18%) pointed to loyalty programs and improved pricing for repeat purchases (15%) as effective strategies.
Agency respondents for the most part agreed with company respondents, citing personalized interactions (34%) and improvements to customer services (34%) as their top tactics. But they were more enthusiastic about loyalty programs (31%) than their in-house counterparts, while being less so about cross-selling and up-selling. The analysts hypothesize that the respondents’ profiles could lead to agencies’ more positive view coming “mainly from a data mining perspective, while brands’ perceptions are more multifaceted.”
When it came time to identify the most effective tools to enhance CLV today, the leading response was one that has often eluded marketers: a single customer view. Close to one-third of company respondents indicated this to be one of their 3 most effective tools today; others also pointed to customer experience management solutions/platforms (28%), strong interaction between online and offline channels (27%) and a dedicated retention team (25%).
Interestingly, much-buzzed-about topics such as a focus on smartphone and tablet experience (15%) and use of product or service by influencers (13%) don’t seem to resonate with marketers – at least when it comes to increasing CLV today.
As for future strategies? Company respondents were most likely to see an improved customer experience (62%) as lending itself to an enhanced CLV. That’s not surprising; it’s logical to expect that customers who have better experiences will prove more loyal in the future. Indeed, improving the customer experience (CX) has been a recurring theme this year; earlier, company respondents to an Econsultancy survey named customer experience their single most exciting opportunity of the year, and more recent survey results indicate that large companies are bullish about the prospects for increased business results from their customer experience efforts, with a strong majority planning to spend more to attain those results.
Beyond CX, company marketers expect that better use of data (52%), better customer insight, such as that single customer view (50%) and increased personalization (50%) will do the trick. Once again, an increased focus on mobile channels (20%) appears to be less of a factor, though presumably improving the mobile experience counts towards the overall improved customer experience marketers are shooting for.
Increasing CLV through the various outlined tactics and strategies also requires overcoming current hindrances. According to company marketers, those primarily lie in siloed organizations lacking a coherent approach to marketing (35% citing as a top-3 challenge) and poor systems/integration hindering customer experience (34%). (For their part, agencies cited these as their top-2 also, though in reverse order.)
Another, more basic, problem challenging marketers’ ability to increase CLV? An inability to measure it, cited by 27% of company respondents as a top-3 hindrance. In fact, elsewhere in the report, just 42% of respondents strongly (11%) or somewhat (31%) agreed that they are able to measure customer lifetime value. Clearly this will have to be an area of focus if marketers are to figure out what works and what doesn’t.
About the Data: There were almost 900 respondents to the research, which took the form of an online survey in October and November 2013. More than half (53%) of survey respondents work for client-side organizations, while 46% work for agencies, vendors or specialist consultancies. Some 45% are based in the UK, with another 22% based elsewhere in Europe. The retail sector (22%) was the most heavily represented, followed by technology, media and telecoms (19%).