A few days ago in a radio appearance i was asked the following question. What is better 1 client who pays a lot or 100 who pay little? Doing a deep reflection. The a priori answer is not easy at all DW Leads and implies a very formal treatment to give the most accurate answer. What matters is the value of the customer. If our business criterion is purely billing, i will stick with. The option that generates the most income, that is, a priori 1 client who spends a lot. If our criterion is to have. A client portfolio, the answer would be 100 clients. In both cases, a subtle detail appears that we must take.
What Is Customer Value?
Into account before positioning ourselves at 1 or 100. My answer is: “it depends.” in other words. I have to start from a clear strategy of what i understand by client and what i want to achieve with them. Everything in this life has a price or rather a value, be it estimated, real, observed, suggested, rational, emotional, social, etc. I want clients who have a high Denmark phone number value for my company. Perhaps this is the statement.that the vast majority of companies have in their minds. This means that before giving an answer out of 1 or 100 we have to define some things. What is customer value? What is a good client?
How to Calculate the Clv?
This is the first question we must ask ourselves and the answer will surely come from the following statement: “a good customer is one who spends or buys a lot in my company, who has a high recurrence or frequency of purchase and that behavior leads doing for a long time.” surely the vast majority would agree with this statement. The solution is called clv or rfm , this potpourri of letters has hidden terms like customer lifetime value (clv) or recency, frequency and monetary value (rfm) models. They are still methodologies to calculate the customer’s value in monetary units or in a value scoring. How to calculate the clv? If we want to efficiently calculate the value of a client, we must be able to determine its life cycle in the company.