MarcomMetric
6 ways to determine which customer groups are strategically important.
The amount of money a customer has spent during a given time period.
The sum of all historical transactions. Lifetime value (LTV) considers customers as a lifetime income stream (e.g. buying repeats, parts and service) and calculates the present day value of all historical and future net margins
It measures how often the customer buys from you within a given period. Relationship intensity is expressed in the number, frequency and level of contacts between the company and its customers. If a customer rarely buys, it may mean that you share the customer with competitors.
The estimated lifetime of the customer. High future lifetime value customers are strategically important.
The likelihood of the customer to continue doing business with you. Customer satisfaction brings loyalty, which brings profits. This metric requires surveys and is more pronounced in business-to-business contexts where companies know each other better than in business-to-consumer contexts.
A company can measure its performance by asking “how likely is it that you would recommend company X to a friend?” or “how likely is it that you will continue to purchase our products and services?”. Customers respond on a 0-to-10 point rating scale (see image above). Detractors generate negative word-of-mouth, passives are vulnerable to competitive offerings, and promoters generate positive word-of-mouth. Hence, net promoter score (NPS) takes the percentage of promoters and subtracts the percentage of detractors.
