The only metric that matters to customer focused businesses – Lifetime Value

I was recently asked by a client, “if you could only have one measure to manage your business, what would it be?”. I quickly thought about the range of metrics available to executives today: profit per customer, market share, revenue growth, customer satisfaction, new product success, share price… the list goes on.

However the one metric that always comes to mind is one that not many businesses use, lifetime value of customers, and yet it is the most powerful.

This metric provides a long term customer centered view of your business. What is the value, in profit terms, of an average customer over the potential life of your business relationship?

This is not a static number but an active one that can be used to value your business and identify opportunities to grow that number.

It’s real power however is in galvanizing everyone in a company around the importance and value of customer relationships. It proves the tangible logic for why every interaction matters and connects everyone with the ultimate customer.

Below is a video interview with one of the great practitioners of Lifetime Value, Chris Zane of Zane’s Cycles

If you are interested in seeing more from this interview series you can go to MarketCulture’s Video Library

About these ads

3 responses to “The only metric that matters to customer focused businesses – Lifetime Value

  1. Pingback: 3 ways to secure senior management buy-in and use it to establish a customer-centric culture | MarketCulture Blog – Using Market-Driven Culture for Competitive Advantage

  2. Pingback: The wrong way to fire you customers – Lessons from Wells Fargo | MarketCulture Blog – Using a Customer Culture for Competitive Advantage

  3. Pingback: Stop doing stupid things to customers | MarketCulture Blog – Using a Customer Culture for Competitive Advantage

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s