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Customer Lifetime Value
Focus on the customers who will bring you the most revenue
Estimate the value that a single customer can bring to your business
With Customer Lifetime Value, predict the future value of a customer or user.
Whether you sell products or offer services, every customer and user is important, but perhaps those who already bring you revenue are a bit more important. Why not concentrate on them?
Retain your customers and identify those who bring the most value
Customer Lifetime Value is a tool that helps you estimate how much revenue you can expect from a particular customer or user.
If you operate as a company with a large number of customers or clients, you know that not all will generate the same revenue over time. Invest in and reward customers and users who are loyal and long-term valuable. Such a strategy can bring you a much higher return on investment.
Based on the dates of previous purchases, frequency, spending amount, and the date of the first purchase, the model predicts which customers are likely to remain active and generate revenue.
The higher the Customer Lifetime Value, the greater the likelihood that customers or users will stay loyal to the company or brand and bring more revenue over a longer period.
What about customers and users with low Customer Lifetime Value?
For customers and users with declining or low Customer Lifetime Value, strategies can be designed to retain them, such as personalized promotions or discounts to boost their loyalty and encourage repeat purchases.
Accurate customer assessmen half the job done
The Customer Lifetime Value model primarily considers the previous behavior of customers or users, their activity level, and purchasing trends. Customer value is measured through the following dimensions:
- Recency – when the customer/user was last active within a given period,
- Frequency – how many times a purchase was made within a given period,
- Monetary Value – how much money was spent within a given period, and
- Tenure – when the first purchase was made.
Based on this data, Customer Lifetime Value can estimate the likelihood that a customer/user will remain active and the value you can expect from them in the future.
Testimonials
“As a long-time client and a partner of ThingSolvers, I’ve always been impressed by their practical solutions-driven spirit and mindset, combined with deep expertise in data analytics & data management.
What I truly believe sets them apart is their strong commitment to collaboration, paired with a no-nonsense approach—a combination that makes even the most challenging projects manageable.”
“Anticipating customer behavior and creating strong loyalty programs are no longer future, but the present of modern retail business. Experienced, dedicated, and extremely open-minded professionals from the Things Solver team helped us to dig deeper into our customer database. They developed a powerful tool which helps us to understand our customer’s behavior and provide them the best possible service.”
Our online shop, www.gbs.rs, has been using the Solver AI Suite service from Things Solver for several years, and we are extremely satisfied with the results their AI search tool delivers. Thanks to this solution, our shop’s users can easily and quickly find products that the AI algorithm recommends based on personalization, as well as products that best suit their needs, significantly contributing to their satisfaction and making the shopping experience seamless.
We would also like to highlight the professionalism and kindness of the Things Solver team, who are always ready to collaborate and quickly adapt the tool to our specific needs. Every personalization and additional service has been implemented efficiently and within the agreed timelines, which is of great importance to us.
Golden Beauty Shop is an online shop where customers can find a wide range of decorative cosmetics from the Golden Rose brand, hair dyes from Elea, MM Beauty, and Miss Magic brands, as well as hair and hand care products from the Aroma brand. With the support of Things Solver, our team is able to deliver the top-notch customer experience our shoppers expect and deserve.
Things Solver has become an essential part of our operations at Gigatron, enabling us to make informed and faster decisions. Their advanced solutions for analyzing website visitor behavior, advanced segmentation, and customer profiling have significantly improved our operational processes, particularly in optimizing sales strategies.
Thanks to Things Solver, we have been able to identify key trends, personalize offers, and enhance team efficiency. Their team is highly professional and always ready to provide support, making collaboration with them straightforward and productive.
“We began the cooperation with the Things solver team couple a of years ago, after thorough analysis with whom we want to make our business smart wise. As of then, we have expanded our cooperation in all three countries (Austria, Switzerland and Germany) and the first results have become visible in two months. Planning our sales and retention strategies become an interesting field to expand our strategies through Things Solver Suite.
Beginning with smooth onboarding from Things Solver sales guys, through sharing the context of our data with clever and thorough data analysts, I may say that we have become satisfied and much smarter Things Solver clients. Every day, in every respect, we are progressing more and more Together!”
“Partnering with Things Solver has completely changed the game for us, turning us from a traditional Telecom into a data-powered company that really gets our customers and makes smarter business moves. With their AI skills and cloud data lake technical implementation support, we can try out new ideas fast in the hyperscaler environment and see results right away.
Working with Things Solver means we don’t just understand our customers better; we’re also ahead of the curve with best practices and fresh ideas – because they’ve always got our back with guidance and support, in a very easy-going atmosphere!”
“Working with Things Solver empowered us to start transforming our business from being a marketing platform to a data-driven organization that utilizes data to build up customer relationships and make better business decisions. With Things Solver Suite you can test and learn quickly. Learn not only what your customers want, but also learn best practices in the business, because Things Solver guys won’t let you out in the dark. They are always there for us to support, advise and deliver! As important as all before mentioned – working with you guys brings so much fun and joy!”
“Collaboration with Thing Solver is a comprehensive journey which leads from discovery to delivery. Their rapid adoption of the latest market trends and receptiveness to our needs, combined with friendly conversation, brought us added value in a relevant business context. Keep it up!”
Frequently Asked Questions
Find answers to the most common questions you may have.
Why is Customer Lifetime Value important for my company?
It helps you identify the most valuable customers and users and focus on retaining them. This helps with budget allocation, increases revenue, and assists in planning and executing loyalty strategies that increase the long-term value of each customer/user.
How does Customer Lifetime Value help in planning marketing campaigns?
With CLV, you can identify customers/users who are likely to generate the most revenue in the future. Based on this data, you can create targeted campaigns that foster loyalty, reduce churn, and increase the value of each customer through personalized offers.
What if a customer makes only one purchase?
For customers who have made only one purchase, it’s not possible to provide a precise estimate due to insufficient data. More purchases allow for better future value estimation.
How can Customer Lifetime Value help retain a customer?
CLV helps identify customers whose value is declining and who are at risk of becoming inactive. Based on this information, you can devise various retention strategies, such as loyalty programs, discounts, or personalized offers to encourage repeat purchases.
Can Customer Lifetime Value help with acquiring new customers and users?
Yes, it can be used to determine how profitable it is to invest in acquiring new customers based on how much similar customers contribute in value in the future. This way, you can more accurately allocate the budget for marketing campaigns aimed at these activities.
In which sectors can Customer Lifetime Value be applied?
CLV is applicable across various sectors, including retail, e-commerce, banking, telecommunications, insurance, and many other industries where long-term customer relationships and repeat purchases are possible.