How to assess if your CRM program can 'succeed? Answer: with the calculation of the Lifetime Value (LTV).
And the best and 'we can measure it, as a simulation, before you actually invest in the program. The LTV measure future profits of a group of customers, from their purchase behavior.
To calculate the LTV we need a customer database which contains the history of their purchases. Then, Excel, we can create a table LTV, using indicators derived from the customer database.
The most 'important' the Retention Rate (RR) indicates the percentage of customers who remain active from year to year. The total profit (equal to total revenue minus total variable costs) is multiplied by the "discount rate": in fact we are calculating a future profit. The discounted value is then divided by the number of initial customers: the value 'the LTV.
course, this calculation should be carried out for more 'of a period: in all you have to consider only customers left over from T1 (the RR in action!) And observe the variation of the LTV. Here's how to measure the results of our program CRM: - if the LTV increases, the program works - if the LTV goes down, we need to review your strategy.
REFERENCE
How Lifetime Value is Used to Evaluate Customer Relationship Management CRM
Strategy - The first blog dedicated to the CRM strategy, curated by Marco De Veglia. FOR YOU FREE report on Best CRM Website: http://www.crmformarketers.com/ 
0 comments:
Post a Comment