Customer Lifetime Value: The End Goal Guiding Your Digital Transformation
What percent of companies consider customer lifetime value (CLV) as a measure of business performance?
A. < 40%
B. 41% – 60%
C. 61% – 80%
Answer: C. A recent Frost and Sullivan report shows that 70 percent of companies surveyed use CLV, which is the present value of all the future cash flow attributed to a customer relationship. Of these companies, 67 percent consider it to be an essential measure of their business strategy. If you want to learn more about how to improve customer lifetime value in your company, read on…
The strategic value of service reps
Customer service representatives know more about your customers than anyone else, so why aren’t you harnessing this treasure trove of data?
It’s no secret that loyal, returning customers have a higher customer lifetime value (CLV) than new ones. They spend more money, are more likely to sing your praises to their friends and across social media, and, if you have enough of them, they can help you weather even the most brutal economic storm. According to a SumAll survey, businesses with 40 percent repeat customers generated nearly 50 percent more revenue than similar businesses with only 10 percent repeat customers. And every time they return, they become more valuable to the business and, in turn, increase their projected CLV. A customer who has only made a single purchase has a 27 percent chance of returning, while someone who’s made three purchases has a 54 percent chance of coming back.
One of the best ways to increase CLV is by providing customers with a more seamless, communication experience, driven by content optimization capabilities that focus on connecting the customer to the right channel at the right time. “Every interaction with a customer is an opportunity to create a brand advocate or a raving-mad critic,” says David Rodnitzky, CEO of 3Q Digital, a Harte Hanks company.
That includes human interactions, says Lauren Edvalson, CEO at Edvalson Marketing in Sacramento, a marketing consulting firm.. While some companies think digital transformation means eliminating the need for customer service reps (CSRs), you have to first consider what your customers want. “We would never eliminate our CSRs,” she says, noting that many customers prefer to interact with a live person, especially when dealing with complicated issues. “They are incredibly valuable to the service experience, and they know better than anyone what customers like and don’t like about the company.”
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CSRs can no longer operate as isolated entities within the company. Digital transformation means companies can, and need to, integrate all of their customer channels–website, mobile apps, call centers, brick and mortar locations – to create a seamless experience, regardless of how the customer moves through the system. CSR’s play a vital role in this process – both in recognizing customers as they enter the system, and capturing valuable data about their experience to shape future customer engagements. But none of that can happen if the rep doesn’t have access to the right information.
No matter how charming your reps are, if the customer has to rattle off their name, billing address, email, and credit card number before they can even ask a question, you’ve already lost the opportunity to wow them. Customers today expect to be recognized instantly, whether they are on your website, app, or service line. To do that reps need to be able to know who they are, what they purchased, and where else they have engaged with the brand before picking up the phone. This integrated service experience not only eliminates time wasted gathering data you already have, it allows the rep to immediately focus on the customer’s needs, which directly impacts their experience.
Don’t be a fool
Providing great service is the first half of the equation. Companies also need to make sure they understand and leverage the vast amount of data these services reps are gathering. From trending complaints, to surges in product requests, and even customer demographics, the feedback CSRs get should directly inform how you connect with and better meet your customer needs. “When a customer visits your site, your online analytics tool follows their every move,” says Rodnitzky. Combining this data with the feedback collected through the call center, you can reverse-engineer why customers contact you. “All of this information can be mined to create additional FAQs and resources to resolve future customer needs.”
You can also use the data to inform communication and marketing efforts, Edvalson says. She uses center data to make media buying decisions and to determine how best to engage with customers, i.e. to send an email scheduling a system tune-up, or a phone call to address a repair problem. “Understanding their needs helps us decide the best way to communicate with them.”
Edvalson admits that figuring out how to use all of this data to better engage with customers has been difficult but absolutely worth the effort. “As we grew we realized that we are capturing so much information about our customers through our service centers,” she says. “We’d be fools not do something with it to make our company better.”