Have you seen a great customer closeness idea in practice lately, or know a company who does a great job earning loyalty? Let me know about it in the comments or write bryan.rutberg@advantary.co.

Customer Lifetime Value (sometimes known as Customer Long-Term Value and commonly abbreviated to CLV, CLTV or LTV) has become a much-watched number for businesses. It applies to organizations that sell to consumers and to businesses; it’s intuitive to understand how it works and how meaningful it is to grow the number; and in a world of on-line sales and CRM systems it’s easy to track of every customer’s number.

I love the concept and believe smart companies find ways to take it even further, beyond raw numerical measures.

What It Is

At its heart, CLTV is the measure of revenue “attributed to [a] customer during his/her entire relationship with the company.” This textbook definition has been endorsed by The Marketing Accountability Standards Board and millions of words have been written on how important it is to measure and how to do it right.

There are three ways to move the needle on the CLTV equation. Companies can increase a customer’s CLTV by—

  • Increasing the size of sales to the customer
  • Increasing the frequency at which the customer purchases
  • Keeping the customer buying from the company for a longer period of time

It’s easy to see how this works. Amazon’s “people who bought this also bought…” recommendations and the sales clerk who shows me the tie that perfectly complements the shirt are trying to boost the size of the sale, and B2B sellers who promote service agreements or bundles are doing the same.

Come On Back

“Come back” coupons in our real-life and electronic in-boxes try to drive more frequent sales, and auto-replenishment offers from Harry’s Shave Club or grocery delivery companies do the same. For B2B think auto-shipments of photocopy paper or printer toner, or finding more ways to drive software license implementation or cloud consumption. Investments in customer support, line extensions, offers that change as customer companies mature—all these try to keep customers purchasing longer.

That simple equation doesn’t tell all, though. Here are ten more ways that companies can recognize value from customers when they treat them right.

  1. Referrals.  According to a ZenDesk study, 87% of customers with a good experience told at least one other about it, and 33% shared their story with at least five others. (The numbers for bad experiences are 95% and 54%, so it pays to keep customers happy!) Chart new customers by referral sources, and reward happy customers who deliver interested prospects to your doorstep.
  2. References.  Earn the right to ask your best customers to speak with prospects. The right word from a happy company can tip a deal in your favor.
  3. General testimonials.  When you hear something nice about your product, team, or service, get it in writing and get permission to use it. Those quotes belong on your walls, on your website, in your sales literature, in your sales and executive presentations.
  4. Press quotes.  Give a reporter names of satisfied long-time customers for an upcoming article. Good reporters for big-name publications and sites will be doing their own research but it can’t hurt to offer suggestions, and local press may take your recommendations and run with them.
  5. Analyst discussions.  In the world of tech, analysts can make or break a product or company with their research reports. Your successful and happy customers are your bulwark against showing up in an undesirable position in their rankings.
  6. Panelists and speakers at events.  Conference and trade show attendees can trust you when you tell them you’re great, but they’ll trust a customer with problems like theirs more. Same goes for your promotional events—most would rather hear a 10-minute story from your customer than an hour-long speech from your CEO.
  7. Success stories and case studies.  A rich body of these will allow prospects from different industries and geographies, with different-looking processes and problems, to find your customers who “look like them” as proof points for your marketing claims and sales pitches.
  8. Beta testers.  Some of your customers want to be cutting edge to get every competitive advantage they can. Others may like to tinker or take pride in knowing what’s coming next. All of these “edge” customers can give you great feedback on your latest efforts, and you get to make them feel special in the process.
  9. Service on customer advisory groups.  More general than beta testers, advisors can be reached for advice on product ideas you haven’t brought to market yet, or on operational issues that affect their relationship with your company but not your product. Most CAG members I’ve known have taken true pride in their service on these councils, enhancing their loyalty to the vendor.
  10. Customer “buddy systems”.  For customers who don’t compete with one another, let new adopters of your product or service connect with experienced users as part of a complete customer support system. From facilitating 1:1 connections to arranging meet-ups at industry events or in specific geographies, or developing formal user groups, companies that trust their offerings and their people can benefit from connecting customers to each other without the brand in the middle.

Not all of these are easily measurable, but every one can increase value by making a sale easier, promoting and enhancing your brand, providing proof points for your claims, improving your decision-making by bringing the voice of the customer into your planning and development cycles, and increasing the “stickiness” of your relationship. When they’re focusing on you, your customers are less inclined to answer the calls of your competitors, and more inclined to look to you first when they have a new need.

Have you seen a great customer closeness idea in practice lately, or know a company who does a great job earning loyalty? Let me know about it in the comments or write bryan.rutberg@advantary.co.

Read more about the author, Bryan Rutberg.


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