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Why customer lifetime value is important and how to leverage different market segments

February 15, 2023by Jason Willis-Lee0

Today I want to talk about customer lifetime value. CLV is sometimes called total customer lifetime value, and measures the total value to a business of a customer over the lifetime relationship. This is essentially divided between the front end profit made on an initial sale, the end goal being to convert prospects into paying customers. You should already have a steady stream of leads flowing into your freelance business. CLV is an important metric as it costs much less money and energy to keep existing customers than it does to acquire new ones. So increasing the value of your existing customer base is a great way to drive growth to your business. You must also know the acquisition cost and lifetime value to track marketing success. Remember that markets are diced up in several ways. They are diced up demographically, so I can sell to both young and old customers. Geographically my customers may be in Spain where I live or they may be in India, even for graphically depending on people’s values, and behaviourally. So make sure your suite of products and prices covers options to take full advantage of market segmentation. As you do this, you will find it easier to build a premium position in the market. Remember that it is far easier to sell to more affluent customers with less of a price sensitivity radar than it is to customers towards the lower echelons of the market.

How to Improve Customer Lifetime Value (CLV)?

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