The Value of Customers
It is a long-accepted truism that it costs more to acquire a new customer than it does to keep an existing one. For any small business that is looking to grow, it makes sense to devote considerable resources to the challenge of keeping customers happy and satisfied because they represent a unique, developable asset. Too many businesses take a small-ball approach to customers, seeing each transaction as a one-off instead of an opportunity to create lifetime relationships. These relationships must be considered in terms of their value to the organization, and one way to do this is via customer lifetime value (CLV), a calculation that describes the total revenue that an organization can expect once a customer is acquired.