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(共22张PPT)
Chapter 2
Customer Life Cycle (CLC) and
Customer Lifetime Value (CLV)
Introduction
Learning Objectives
Marketing Orientation
Value Creation
Customer Life Cycle
Phases of CLC
Customer Life Cycle Marketing
Customer Lifetime Value (CLV)
CLV Defined
Applications of CLV
Calculating CLV
How to Improve CLV
Recap
Chapter 2: Customer Life Cycle (CLC) and Customer Lifetime Value (CLV)
After going through this chapter, the students will be able to:
Appreciate the importance of the concept of Marketing Orientation for building mutual reward system for the customers and the organizations
Figure out the contribution of the concept of value creation for achieving customer focus
Understand different phases of Customer Life Cycle and its implication in selecting appropriate marketing strategies
Comprehend the concepts of Customer Life-Time Value (CLV) and its strategic importance
Identify the methods of calculating CLV and the ways to improve it
Learning Objectives
For increasing the effectiveness of Marketing Programs, it is important to know whom to communicate, when to communicate, what to communicate, how to communicate and properly time all the interactions with the customer.
The answer to all these questions can be found by properly knowing the customer life cycle.
The knowledge of Customer Life Time Value enables the organization to focus the strategies to specific segment of the customer and create the balance between efforts and returns.
Introduction
A Production oriented approach
A Selling oriented approach
A Marketing oriented approach
Marketing Orientation
Mutual Reward System
Value Creation
Value Creation Strategies
Customer Life Cycle (CLC)
CLC Marketing
Management wants to know the financial worth of this relationship to the organization so that the decisions regarding the level of efforts to acquire and retain the customers can be made.
The ways to manage the relationship with the customers and at the same time distinguish between a profitable customer and a loss making customer.
The replacement of transaction marketing by relationship marketing has led the manager to find out the new way of finding the economic value of the customer considering both the relationship benefits and accounting profit from the customer.
Customer Lifetime Value (CLV)
CLV is defined as the present value of all net payments during the complete life of the customer with the organization.
To evaluate CLV, all future revenues and costs must be assessed. Simply putting, CLV is the present value of all future purchases by the customer minus the costs to be incurred by the company.
CLV Defined
Allocation of resources
Customer Selection
Segmentation
Merger & Acquisitions
Customer Equity
Marketing Campaigns
CLV Based Loyalty Programs
Purchase Sequence Analysis
Applications of CLV
The CLTV of a customer is calculated based on the following inputs:
The cost of acquiring the customer
Periodic cost of providing service/product
Retention rate of churn rate of the customer
Rate of discounting
Calculating CLV
Computing CLTV
CLV
= Net Present Value of all cash flows from the customer
= Expected Cumulative Margins – Acquisition Cost (AC)
Calculating CLV
How to Improve CLV
The mutual reward system, which results into a win-win situation for both- customer and organization, is centred on customers’ needs and wants.
The concept of value creation for achieving customer focus, which results in retaining the customers and therefore, maximizing their lifetime value, has been discussed. Product Evolution and creating right environment in the organization have been discussed as the strategies for value creation.
Recap
The Five Key-Commitments Model serves as a framework for developing commitments towards Self, People, Task, organization and Customers, which creates the capability of the organization for delivering the superior value to the customers and generating profits for the organization.
The purpose of CLC is to define and understand the different phases through which a customer progresses while interacting with the organization.
Customer Lifetime Value (CLV), which is the NPV of all net payments during the entire life of the customer, is gaining acceptance as a metric used to acquire, convert and retain right kind of customers.
Recap (Contd.)

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