‘Make new friends, but keep the old. One is silver, the other gold’. This may be an old saying, but it’s worth remembering in your business activities. Obviously, regular big spenders are more valuable than single-deal customers. And Customer Value Management (CVM) helps to separate the really valuable from the less valuable. Or in other words: it helps to determine which customers are worth having, and which aren’t. Let’s have a look at the three main benefits of CVM for your business:
1. Knowing your customer
CVM analyses customer relationships and therefore offers a clear overview of which customers are most valuable to your business. It lets you identify who generates the most return and should consequently receive most of your attention.
These insights are particularly useful in decision-making processes. It should be easy to answer questions like ‘What does my customer need?’ or ‘When can I reach my customer?’. And from these insights, you can create the best possible marketing mix.
2. Increasing the value of your customer
Customer Value Management relies on a complex and integrated analysis of several data sources, giving you a 360-degree view of your customer. It’s only by getting an omnichannel view of your customers throughout their journey that you will get a complete picture of their needs, interests and behaviour.
And by connecting all the available marketing, product and financial data, you’ll discover which products and services you should propose at any given moment to optimise your cross- and up-selling opportunities
3. Reducing customer churn
It costs more to acquire new customers than to keep your current ones. So it’s important to keep your churn rate low and make sure your valuable customers are not leaving you.
Combining behavioural data with financial and marketing metrics lets you better forecast customer behaviour based on data from previous interactions and touchpoints.
This will help you understand which channels or touchpoints your customers visit most before churning. With this information, you can set up strategies to reduce your churn rate.
For more about customer value management benefits, take a look at our customer value management guide.