UK marketers agree Customer Lifetime Value is a key metric but most can’t monitor it
Criteo has revealed that marketers across the UK are missing out on revenue and delivering an improved customer experience by not measuring the lifetime value of their customers. The challenges facing marketers looking to capitalise on a long-term customer view means that a three out of four (76 per cent) UK organisations are not able to effectively measure CLV despite its tangible impact on sales, customer loyalty and speed to market. Every marketer surveyed agreed that the importance of CLV will increase in 2018 with the vast majority (72 per cent) identifying better use of data as key to successfully measuring customer value this way.
The findings are part of a new UK-wide study in to 100 marketers’ views on measuring customer lifetime value. Coupled with the opinions of over 2,000 UK consumers, the report also explores how brands and retailers can better meet evolving customer expectations. Key insights include:
- A missed opportunity: While a quarter (24 per cent) of organisations are effectively monitoring CLV, a huge majority (69 per cent) know that improvements could be made. As a testament to the strategic importance of CLV to modern marketing, only a small number of businesses (7 per cent) are doing nothing to monitor
- Long-term gains: 81 per cent of marketers that are monitoring CLV have seen sales increase as a result. 79 per cent of those marketers have also been able to action more timely marketing. Of the marketers planning on implementing CLV, 68 per cent expect to see an increase in retention and over half (56 per cent) believe it will enhance brand loyalty in the long-term
- The data challenge: 7/10 marketers (72 per cent) cite better use of data as a key barrier to employing CLV. For the majority of Britain’s marketers, customer data holds the key to unlocking the potential of CLV and is crucial to reaping the rewards associated with its implementation
- The changing face of customer loyalty: Short-term transactional models are no longer representative of an evolving customer base with millennials who are 11 per cent less likely than the general populous to be swayed by price alone. However, they are significantly more likely to be incentivised by longer term gains such as a free gift (60 per cent more likely), added experiences (45 per cent more likely) or free personalisation (140 per cent more likely) suggesting that creating a customer for life is about more than just point of sale
“The UK’s marketing community couldn’t be clearer on the importance of data to successfully implementing CLV,” commented John Gillan, MD for UK and Northern Europe at Criteo. “Today’s findings confirm the central role information has to play in helping brands and retailers develop a clear, long term view of their customer – something which is boosting sales and improving the customer experience. Given these challenges, marketers should be considering better data collaboration in a bid to accelerate their ability to develop a complete, holistic view of their customer-base. Only by doing this can marketers start to think beyond short-term, transactional gains and look towards maximising the lifetime value of their existing customers.”