Given this current situation and thinking, the idea that "it is more efficient to value existing customers than new customers" is becoming more widespread. As a result, attention is now being paid to an indicator called "LTV (customer lifetime value)," which shows how much profit each individual customer brings. 2. The rise of subscription businesses The rise of subscription businesses, in which customers pay on a monthly or yearly basis and have unlimited use of a service during that period, is also a major factor in increasing attention to LTV.
In a subscription business, acquiring new customers brazil telegram data is of course important, but you also need to aim to keep existing customers coming back and cross-sell to them to buy more products, or upsell to them to buy higher-end products. The indicator that can be used in this case is LTV, and it is no exaggeration to say that it is an essential number for measuring the results of a subscription business. 3. CRM has become more widely used CRM (Customer Relationship Management) is a management method that centralizes the management of customer information and behavioral history, and implements close communication tailored to each customer.
It is used to improve brand value and customer purchasing motivation. LTV is an indicator of a customer's sales and the length of time they use a service, making it a very powerful piece of customer information. Therefore, as interest in CRM increases, so does interest in LTV. How to calculate LTV There are several methods for calculating LTV, but we will introduce the most common ones below. [How to calculate LTV] LTV = Annual transaction amount of customer x Profitability x Number of years customer continues to be with customer LTV = Average purchase price of all customers x Average number of months continuing LTV = average customer price x gross profit / cancellation rate LTV, which can also be translated as customer lifetime value, calculates how much profit each individual customer brings.