The CLV Revolution: Transform Your Ecommerce with Customer Value Optimization

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.

Customer Lifetime Value is a result of how many customers buy again. It includes a variety of metrics related to Retention, Purchase Frequency, Average Order Value, and Gross Margin.

one north star metric that can capture the essence of a company’s health: Customer Lifetime Value.

You have to prioritize the goal of creating value for others, and not just making money. If you provide enough value, the money will chase you instead of you chasing it—like a shadow that finds you on a sunny day.

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

The fact is CLV is not a fixed reality. Impacting it is well within your reach if you know where and how to look inside the numbers.

The CVO methodology is a working process that helps e-commerce professionals and businesses deliver value across every stage of the customer’s journey: acquisition, onboarding, retention (prevention), and reactivation.

Depending on the vertical and the maturity of a company, returning customers can generate up to 90 percent of the total revenue. Here is a picture of aggregated data from my company’s benchmarked data, including two thousand e-commerce companies. It shows how the revenue from returning customers grows in importance as a company matures.

As you go deeper into the CLV layer, you’ll find more and more numbers that influence the ones above. For instance: • The number of orders and how it affects purchase frequency • The product return rate • The average days between days with transactions (ADBT) • How many orders a customer purchases per month