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Customer lifetime value: four phases to maximize success & profitability
Posted by Matt Heinz on December 3, 2012
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In any business, the customer experience and customer lifetime value can make or break your ability to drive and accelerate both growth & profitability. In a software as a service (SaaS) business, that impact is magnified further. The economics of SaaS tend to make acquisition costs fairly high as a function of early revenue, thus counting on longer customer lifetime value to drive efficiency and profitability for the business.
Unfortunately, our actions don’t always reflect this understanding. Look at most businesses, particularly those in early stages of development or growth, and you’ll find teams heavy on acquisition focus but light on retention. Marketing teams with 80 percent (or more) of their focus on acquisition but executing table stakes (maybe a newsletter, maybe a light customer portal) to make new and existing customers successful and loyal.
At the SiriusDecisions Summit earlier this year, Megan Heuer highlighted a four-part model for an optimal customer lifetime value framework. In her words:
Read the entire Matt Heinz article
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