Integrated Approach to Addressing CLV Includes Methods of Improving Customer Retention, Increasing Purchase Frequency and Improving Personalization

Today’s retailers and manufacturers are increasingly implementing new strategies to keep customers coming back. As competition for customer attention and spending intensifies and data that was once siloed is integrated into environments like the industry-leading IRI Liquid Data platform, it is easier than ever to measure Customer Lifetime Value (CLV). IRI’s latest Point of View, “From Surviving to Thriving: Tools to Maximize Customer Lifetime Value,” demonstrates how an integrated approach to CLV can improve customer loyalty and accelerate growth, profitability and enterprise value.

“From Surviving to Thriving: Tools to Maximize Customer Lifetime Value”

“Maintaining and growing customer loyalty is more important today than it used to be, given increased competition and acquisition costs,” said Fernando Salido, executive for Shopper Analytics at IRI. “How retailers and brands respond will determine their success in retaining their highest-value customers and bringing in future high-value customers ― all while improving enterprise value. Businesses that want to maximize every customer’s CLV contribution need to understand the role promotions, programs, products, customer experiences and other levers play in improving lifetime value.”

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To help brands and retailers maximize CLV, IRI has identified practical paths to growth, including:

• Promoting products or services with shorter purchase cycles, high repeat rates and relatively higher margins to improve CLV
• Personalizing customer offers to maximize retention and frequency, which drives greater CLV and enterprise value
• Cross-promoting products that increase profitability per customer
• Leveraging the laws of “customer physics” in your business’s favor, as customers will inevitably reward those that do
• Making business decisions that are accretive both to business profits in the near term and to customer lifetime value in the longer term, particularly from your most important customers
• Adding CLV measures to improve customer loyalty. Without CLV metrics, traditional segmentations may not reveal the right customer opportunities

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“Customer Relationship Management (CRM) software is expected to double in size to $80 billion over the next five years,” said Salido. “It’s clear to IRI that businesses are determined to retain and keep customers in such a competitive market. Having a comprehensive understanding of your customers’ CLV is a crucial piece to effective CRM and can be the key to edging out competition.”

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