Customer Lifetime Value
Sean Moss, Co-Founder & VP of Scoutnet and StellaNStone.com, joined us on the Contact Center KPI podcast!
Our KPI for this episode is Customer Lifetime Value (CLV).
CLV is often complicated and most companies aren’t focused on it.
They are focused on average handle time, first contact resolution, or other “leading” indicators.
Sean says, “Keep it simple”.
What is Customer Lifetime Value?
Customer lifetime value (CLV) is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire journey.
This metric takes into account the customer’s initial purchase, repeat purchases, and the average duration of their relationship with the company.
Key takeaways from Sean on CLV
1. Recognize that Customer Lifetime Value is a KPI worth keeping track of
Whether you’re an in-house contact center or an outsourced contact center, CLV should be on your radar. You can easily prove the ROI to your customers if you’re an outsourced contact center too.
Most contact centers are missing this and focused on other leading indicators like First Call Resolution or Average Handle Time. All which are important, but you can’t forget about CLV.
2. When you focus on CLV, know that other metrics may suffer.
We’re not saying all metrics in general, Sean is referencing for those customers who have exceeded the value that you’ve set forth. If a customer has been with you for 3 years and exceeded the average value a customer brings, the level of attention they receive should be different.
Companies like American Express offer more of a concierge service where their top tier customers are not rushed off the phone.
3. Your customers go through journeys and you need to find ways to improve that journey
There are quite a few journeys that your customers could take. Have you reviewed them lately? It’s important to see the difference between those who exceed the CLV and other who are missing the mark.
This will help you improve processes and other key functions within your organization to try and to move the needle around customer lifetime value.