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As Loyalty Withers, Lifetime Value Needs to Be Redefined

Andrew Kokes, Executive Vice President, Global Marketing, HGS, highlights the importance of understanding and embracing the Customer lifetime value metric.

Andrew Kokes, Senior Vice President, Global Head of Marketing

Article originally published on Destination CRM

Written by Phillip Britt

Customer lifetime value (CLV) is a metric that indicates just how much revenue companies can expect from each customer over the span of their business relationships. The frequency of orders and the dollar amount of orders are other essential CLV inputs.

It’s an important metric for companies, but as customers today have become fickle and are willing to abandon their favorite brands over the smallest customer service gaffes, calculating CLV is more difficult. But that’s no reason to abandon CLV as a metric.

CLV is one of the more important measurements companies have at their disposal, though many overlook it, says Chris Pennington, chief customer officer of SugarCRM. “I really love customer lifetime value as a metric. I think it is a really strong metric, [but] it’s not incorporated as much as it should be.”


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