The CLV Revolution: Transform Your Ecommerce with Customer Value Optimization

Which “job” translates to the highest revenue? • Where is the best place to put the majority of our acquisition spend?

The main difference between clustering and segmentation is that clustering uses unlabeled data to find hidden patterns by using an unsupervised machine-learning algorithm.

you must understand another vital metric: the CAC Payback Period. In a nutshell, the CAC Payback Period is the time it takes for your company to earn back your customer acquisition costs.

the PECTI framework. It helps you invest resources as wisely as possible, as plot campaign initiatives. PECTI is a hybrid between two CRO prioritization frameworks: PIE (Potential/Importance/Ease); and TIR (Time/Impact/Resources). PECTI takes into account 5 different criterias, rated from 1 to 5: potential, ease, cost, time, and importance.

Can we invest even more for certain categories, brands, or locations?

way, as you acquire new customers, you create the right scenarios to invite them back.

The acquisition will always be tied to growth, but the mantra of “acquire, acquire, acquire” is ill-conceived. With CLV at its center, the new mantra is “acquire, inquire, acquire.” See what I did there? Inquiring into why your customers buy, whether you are reading the story of the data, or asking them directly, will help avoid churn and burn.

To stay cash positive, you must continue to understand your unit economics. Many companies calculate the CAC Payback Period based on revenue. This is misleading. I’ve provided two examples below to help demonstrate my point. In them, I have calculated the CAC, and aggregated the data to show CLV across a series of timeframes: 30, 60, 90, 180, 365,

For starters, how much can you earn from a newly acquired customer down the line, and how much can you afford to spend to acquire that customer?