Benefits of Using a Customer Lifetime Value Calculator
It’s quick, easy and accurate. A CLV calculator is a useful tool for any business trying to find their customers potential and estimated worth.
Customer lifetime value calculators give a business many different indications for positive or negative marketing strategies. At the end of the day this metric is very powerful and helpful for any business.
CLV can help with any of the following:
Making Marketing Strategies Clearly Aligned with Revenue Targets
With CLV there is a clear link between marketing campaigns and how it is affecting revenue. For this reason customer lifetime value is considered a very important measurement for any business.
Using a CLV calculator can influence direct changes to revenue. Make sure to consult with your SEO or marketing agency before making changes, as they will be able to fully scale your intentions with your business.
Test out Marketing Strategies by Analyzing CLV
Customer lifetime value can be a very important indicator as to whether certain marketing techniques are working. If you make a point to monitor your businesses’ CLV and work consistently with your SEO and marketing agency, you now can inform strategic decisions based on real time revenue data.
Personalized CLV Calculations
With a customer lifetime value calculator you can begin to specify which customers have higher potential spending and which customers have lower potential spending.
Let’s say you are running a social media campaign and wish to see how effective this campaign is in terms of revenue production. You can calculate the CLV of each customer and track whether they clicked through to your website with social media links and posts, or whether they found you organically on Google.
Now you can see which customers are impacting your revenue the highest, and which marketing channel they are arriving at your website from. Of course this information works itself into a revised and more efficient marketing strategy to better optimize your website moving forward.
At SEO Design Chicago managing and calculating customer lifetime value is a major part of what we do. To learn more about our SEO services check out the following article, SEO Strategies for Every Business.
When Should I Use an Online CLV Calculator?
CLV calculators are a bit confusing. That’s why it’s important to know what this tool can help you with, so you know a potential fix. Some of the topics below cover common scenarios that answer the question, “when should I use an online CLV calculator?”.
When you want to know the worth of your customers. CLV online calculators are important because they are reliable and shape how you approach your marketing strategy. If you are nervous about the math take the plugging in method and trust the calculator.
When using a calculator make sure to double check results before changing a marketing strategy. Most importantly talk with your SEO agency to get professional suggestions on how to stay on top of CLV.
Cohort Analysis
A cohort refers to a group of people, in this case customers on your website, that share similar characteristics. In terms of marketing decisions, you can treat these customers as a group that will respond to similar marketing messages.
A CLV calculation of a few members of one cohort can give you insight into what a whole group of similar minded people think of your business. This tactic is similar to that of sampling a portion of the population in statistics, and one of the quickest ways to draw conclusions from customer lifetime value calculations.
Marketing Costs are too High
Needless to say, acquiring new customers will be a major part of your marketing strategy. But what if this process is simply costing your business too much?
With a CLV calculator you can measure each customer’s hypothetical return on investment. What is meant by ROI in this instance, is the predicted revenue gained by one customer.
Customer lifetime value calculators can help you make informed decisions about where to spend marketing dollars and whether or not they are worth it. After all, sinking money into marketing efforts is only worth it when you achieve revenue results.
Revenue Drops
If you are experiencing a significant revenue drop that cannot be explained, a harmless test to run is a few calculations with a customer lifetime value calculator. Often with SEO and digital marketing tactics the internet ecosystem shifts around, like in the case of a Google core update, and this will affect customers on your website.
In these instances, a quick check of customer lifetime value can give you and your marketing team information about how to resolve issues with revenue.
