In other words, in this example we created, each customer of the brand returns revenue equivalent to R$1,500.00 to the company in a total period of 6 months.
How to use this metric strategically?
Lifetime Value alone cannot convey a direct relationship with results. To use this metric strategically, you need to know another indicator: Customer Acquisition Cost.
CAC
CAC, or Customer Acquisition Cost , is the amount spent on a specific strategy to acquire a new customer, a new conversion.
This metric is interesting because
It allows a comparison between different actions. However, we must think about the relationship between CAC and LTV.
While LTV shows the amount a customer spends on the company, CAC is the investment needed to convert that person.
CAC higher than laos email list LTV: you are spending more to acquire the customer than they are returning to the company;
CAC = LTV: there is no gain or loss;
LTV greater than CAC: the customer made a profit.
How to increase Lifetime Value?
Now that you know what LTV is and how to calculate it, it’s important to know the best practices for increasing this metric. That’s what we’ll cover now.
As we said, LTV is directly related
to customer satisfaction with the brand. So, if you want to increase this metric, you need to offer a better user experience. Some possibilities for this are the following:
Invest in Inbound Marketing
Purchasing habits have afb directory changed a lot in recent times. Actions have stopped being invasive and have become consultative. Now, companies focus on understanding customers’ needs and developing appropriate solutions.
This transformation what expenses are planned and what should be the financial result was made possible mainly by the advancement of the internet, which allowed for greater and easier sharing of information. As a result, customers began to share their experiences, whether positive or not, serving as a reference for new consumers.