From the course: Measuring the Value of Customer Service
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Customer lifetime value (CLV)
From the course: Measuring the Value of Customer Service
Customer lifetime value (CLV)
- Quantifying customer lifetime value, or CLV, provides powerful insight into the impact of customer service. Put simply, CLV measures how valuable a customer is to your organization over time, rather than just one purchase. CLV applies to any organization that sells products or services and with nonprofits supported by donors. And though far less common, I've sometimes seen it used with government services that either reduce costs or bring value back to a community. Here's a tip. Check with your finance or marketing teams to see if they're already using a specific method. And, if so, that's great. Many times I'll find CLV being used and tracked in one part of the organization, but for whatever reason it doesn't make its way over to customer service. If you don't have a CLV, here's a basic approach. First, determine the average annual sales amount. To do this, divide total sales by the number of sales. Let's say you run…
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