Regular Customers are KING
What is LTV?
Do you know the word “LTV”? Or if you already know, do you have LTV data of your customers?
LTV stands for Life Time Value, this is the total number of profits that a single customer brings to a company throughout his/her lifetime.
How important is high LTV to you?
“The majority of sales are from few repeat customers” is a phenomenon seen in all industries, it is also known as “Pareto principle (80/20 rule)”. In other words, a few “high LTV customers” bring more sales. In fact, this phenomenon also can be seen in our (Icomm’s) clients too, it is around 20~30% of their customers are producing 70~80% of sales. This means having many repeat customers (high LTV customers) contributes directly to the company.
Most of marketing activities from companies such as advertisements, sales promotions are “mass approach” that targets to mass, it doesn’t distinguish between past purchasers and new customers. However, with this marketing activities alone, it is difficult to obtain repeat customers who lead to stable sales.
For customers who have purchase experiences before, it is possible to foster new customers to repeat customers by implementing CRM instead of mass approach.