How Do Retail CFOs Increase Customer Lifetime Value?

In the business world, there are many terms that you might overlook or even shrug off as a retail CFO. Other terms, such as the Customer Lifetime Value (CLV) are significant and cannot be ignored; in fact, the CLV is one of the most crucial business metrics you will ever have to deal with. If you wish to learn more about CLV, how to increase the Customer Lifetime Value as a retailer CFO, and other relevant information, then you are in the right place. 

Understanding the Customer Lifetime Value 


CLV is a calculation of a customer’s worth in your organization. It is an estimated total of what the customer will spend in your firm over the entire time he/she will buy from you. The value is critical as it helps you decide whether or not it is a good idea to incur certain costs such as those of acquiring a new customer. 


Who should be More Concerned about the CLV? 

The concept of CLV is pretty significant for businesses that provide multiple transactions for each customer. For other firms, such as construction companies, Customer Lifetime Value matters less since they mostly deal with their clients once in their lifetime. However, it is important to calculate the CLV for the one-time purchases since it is possible for those buyers to make referrals. 

Why CLV is so important in your company?

Customer Lifetime Value helps you to know if your company’s growth is healthy or not. It will accurately measure the level of client relationship management in your retail business. If your relationship with your clients is weak, they are most likely not going to come back for your products and the CLV will be low. You are, therefore, required to understand your customers better to increase their loyalty and retention. 

  • CLV shows the quality of your products 
  • CLV helps identify the most productive customers to serve them better  
  • CLV inspires healthy margins  
  • CLV gives CFOs cash to reinvest and to grow the  
  • Customer Lifetime Value is an important tool in the budgeting  
  • High CLV shows whether the enterprise is viable. 

Campaigning as a Way of Increasing CLV 

Marketing campaigns are critical strategies that play a significant role in incentivizing long-term client loyalty and increasing the rate of repeat purchase.

Here are five major campaigns that you should consider trying as a CFO. 

  • Replenishment Campaigns 
  • Repeat Purchase Campaigns 
  • Loyalty Campaigns 
  • Cross-Selling Campaigns 
  • Upselling Campaigns 

Other Foolproof Means CFOs can use to Increase the CLV 

Cross-selling, upselling, loyalty, repeat purchase, and replenishment campaigns are perfect for boosting the Customer Lifetime Value.

Here are other means that have been tested and proven to work that CFOs can put into use. 

  • Change the Billing Cycle 
  • Offer Personal Customer Service 
  • Be Keen on Customers’ Feedback 


Computing Customer Lifetime Value 

Having known the most effective means of increasing the Customer Lifetime Value, it is important also to learn how this value is computed. There are many ways to compute the CLV; here is the easiest procedure. (The procedure encompasses three components: the purchase frequency, the average value of the order, and the client’s lifetime length). 

The CLV is one of the most powerful indicators of the health of a business. CFOs should focus more on increasing this value instead of chasing indefinable new customers. 


Read more about the Customer Lifetime Value,

Download our CLV Mini Guide!



January 28, 2019
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