Measure the real value of your customers!
Your customers can interact with and create value for your firm in a variety of ways. Companies often assess the value of their customers based solely upon their transactional activity. But is this methodology sufficient to provide the businesses with a deep insight of the value of their clients?
Lifetime value modeling to redesign the product palette
The issue: When our client called for our help, the business was infront of a great challenge. In view of an exclusive deal that had successfully negotiated, a deal that would result in significant financial benefits for the business, our client would have to discontinue the products of 70% of its clients. Our task was to formulate an end-to-end client management strategy that would minimize customer disatisfaction and attrition and would protect existing sales and revenues.
The actions: Trying to effectively address such a complex task, top priority for ClientIQ was to identify which segments to prioritize allocating the vast majority of our client’s resources. To do so, our analytics team calculated the internal lifetime value by customer (CLV), which was then correlated with the external lifetime potential. Based on the findings, the portfolio has been clustered into dinstinct groups with similar characteristics and needs, allowing our strategy team to set the appropriate business objective by segment and therefore formulate the most relevant marketing approach.
The results: Looking at the results of our strategy, one could immediately aknowledge the value of CLV modeling that ClientIQ introduced. Customer spending increased by 8%, generating €68mln incremental sales, while net revenues improved by 20%, generating €5.2mil incremental net revenues.