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To increase your customer value, your organisation needs to be completely customer-oriented, with specific customer management KPIs. You’ll have to determine different customer management strategies and tactics, adapted to the specific stages of the customer life cycle. You’ll also need to develop a customer journey for different personas, in order to improve the customer experience at each stage. This article focuses on strategies to increase customer value according to our customer value model.

A customer-oriented marketing organisation increases customer value

Companies that are very successful in marketing often have two separate marketing departments – one that focuses on acquiring new customers, and another  that focuses on customer value. The customer value model that is often used is the ‘get – keep – grow’ model.

The acquisition marketers focus on getting (acquiring) new customers, while customer marketers focus on keeping existing customers and increasing their value.

The main KPIs for a customer marketer are:

  • Number of customers
  • Customer loyalty, i.e. the length of time customers stay customers
  • Churn: the percentage of customers that leave in a year
  • Turnover per customer
  • Profitability per customer
  • Customer lifetime value: # customers x lifetime x contribution (turnover – cost)
  • Satisfaction or NPS (Net Promotor Score)
  • Customer experience


The customer life cycle in 6 stages

There are several strategies and tactics to increase customer value, which may vary according to the life cycle phase.

customer value model 4P square


1. Acquisition phase

Companies – and their salespeople – need to acquire customers by setting the right expectations. When companies don’t meet customers’ expectations, they lose them. And the cost of acquiring customers will be higher than the return, meaning you are losing money.

2. Welcome phase

In the very important welcome phase, customers are welcomed to the company. This is an opportunity to reinforce the fact that they have made the right choice in purchasing from you / signing up for information.

Great marketing companies have welcome programmes, e.g. customers are contacted to check whether they have all the information they need, or customers receive a personalised information package. Welcome mails are also a great example.

Did you know that users who receive a welcome mail show 33% more engagement with the brand?

3. Loyalty phase

There are various strategies you can use to keep your customers loyal, such as loyalty programs or pampering campaigns. You can also include reduction codes or special offers, and invite them to exclusive events. By doing this, you are giving them reasons to consider spending even more money on your brand.

Cross-selling and up-selling campaigns are also great loyalty drivers. And even down-selling can be an option worth thinking about. In the telecom sector, this is often used as a technique to create loyalty: switching your customer to the right product or service at the right price, even if you earn less in the short run.

Your customer will be happier if the offer is adapted to their needs, and in the long run, the customer lifetime value will be higher thanks to increased loyalty. In the end, your customer will actually become more profitable.

4. Consider to leave phase

At a certain moment in time, customers may start to think about leaving, or switching to another brand. Developing predictive models about who is going to switch brands and leave your company as a customer can be highly valuable. As soon as you know who is likely to leave, you can develop personalised actions to retain those customers. Often it’s enough to proactively contact a customer to make him change his mind.

5. Leave phase

For many products and services, it’s very difficult to know whether a customer has switched to another brand. But in other cases, you do get some warning, and with it, the opportunity to do something about it.

For example, with telecoms and energy companies, customers often express the intention to change provide. For these kinds of situations, it’s important to have retention offers ready, i.e. offers you can make if a customer says that they wish to leave.

6. Win back phase

This is about figuring out how to get your previous customers to buy from you again and spend more money the next time. Here, it’s a good idea to prepare some win-back offers or promotions. An example could be to offer the same advantages as for loyal customers when the customer comes back within X months.

The customer journey

Customer loyalty increases customer value, and one or the main drivers of customer loyalty is making sure that the customer experience is great. But where do you start?

First of all, you need to understand who your customer is. This may sound simple enough, but it’s an area where many companies struggle. To increase customer value and improve customer experience, you need to know:

  • what your customer segments are;
  • what the personas are for those segments;
  • how they behave and what touchpoints they have on their customer journey.

Finally, you’ll need to measure their customer experience along all those touchpoints and identify critical points.

Here is a step-by-step approach:

Start by segmenting your customers (not be confused with ‘targeting’), i.e. dividing them into homogeneous groups with similar needs and similar behaviour. The sum of all segments is the total of your market and they should not overlap. In McKinsey language, this is called MECE segmentation, i.e. ‘Mutually Exclusive, Collectively Exhaustive’.

Next, we recommend describing personas, which turn your customer segments into identifiable humans. Using personas makes it easier for marketing and sales efforts to have a clearer focus on the type of people that make up their target audience.

The following step is to develop your customer life cycle. What are the important phases in the life cycle? Make a timeline and develop the touchpoints your customers have during each phase in the customer life cycle. This will serve as a road map for each persona, from getting to know the company or brand to becoming and being a customer. It’s their customer journey.

Finally, try to measure the customer experience (CX) for each touch point, but pick your battles. How can you measure customer experience? 4P square has developed a model to measure customer experience based on three components: (1) effort, (2) success and (3) emotion. In short, CX = f(effort, success, success).

For more information about our customer value model, take a look at our customer value management guide.

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