Once you’ve taken a look at your beautiful results, you should be trying to replicate this behaviour with your prospective customers in order to turn them into first-time purchasers. Improve output from customer support Focus your time on giving special attention to your most valuable customers.
Never forget Pareto’s handy little principle: 20% of your customers generate 80% of your revenue.
Information about your customers with the highest CLV (known as your VIP customers) will also give you insight into exactly who you should be targeting in terms of demographic.
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Focusing on CLV will change the economics of your customer acquisition strategy.
Suddenly you can pay a lot more to acquire a customer because you are not held back by the profit generated from a single purchase, but from the purchases made over a lifetime with your brand.
To quote Vladimir again: "Predictive techniques..always limited to the horizon of our models' predictive accuracy and confidence." Having said this the more tailored your CLV equation is to your specific industry the more accurate it will likely be. It is essential to do these calculations to get a real understanding of how valuable your customers actually are, the more accurate you become the more powerful your marketing can be.