Loyalty Strategy

New Report Finds Opportunity to Re-Think Customer Lifetime Value

Press Release covering Customer Loyalty and related news.
Image by Michael Bußmann from Pixabay

New CMO Council research provides insight on how to define, measure and track customer lifetime value for strategic growth and profitability

SAN JOSE, Calif. (March 2, 2021) — Today, the Chief Marketing Officer (CMO) Council, in collaboration with Deloitte Digital, published a new report – “Humanizing + Analyzing Relationships To Drive Revenue, Retention And Returns.” The new report details the challenges and best practices for segmenting customers and defining, measuring and tracking customer lifetime value (LTV). 

The insights are based on a survey of over 150 brand leaders and in-depth interviews with executives from Informatica, PepsiCo, Electrolux and RedBubble. Download the full report at https://cmocouncil.org/thought-leadership/reports/humanizing-and-analyzing-relationships-to-drive-revenue-retention-and-returns.

“Humanizing + Analyzing Relationships To Drive Revenue, Retention And Returns” highlights the importance of understanding LTV in order to inform strategic business decisions and marketing budget allocation. 

The report found opportunity for improvement:

  • 47% of marketers track LTV slightly well or not well at all
  • 68% rate their LTV-to-CAC (customer acquisition cost) ratio as average, below average, or very poor
  • 44% are slightly effective or not effective at segmenting and targeting customer sets with the most potential for long-term value

“More sophistication with LTV can help companies focus their marketing programs and budgets and respond to shifting markets,” said Donovan Neale-May, Executive Director of the CMO Council. “Our study found that a majority of CEOs, chief revenue officers, sales leaders and line-of-business executives want to see quarterly LTV to help them make better strategic decisions.”

LTV is an indicator of how well a company identifies and nurtures profitable, long-term customer relationships. The biggest challenges for organizations include:

  • Aggregating the right data for a robust view of the customer
  • Shifting from assumptions to predictive knowledge of the customers’ needs
  • Identifying the moments of opportunity to deliver delight and differentiation
  • Listening for customer cues beyond how they respond to an engagement tactic
  • Meeting the customer in real-time

“From working with our clients, we’ve seen that many who build strong, emotionally rich relationships did so through investments in customer experience capabilities and real time feedback loops, which cultivated customer loyalty and retention,” says Tim Greulich, Operational Customer Experience practice lead, Deloitte Digital, and Managing Director, Deloitte Consulting LLP. “This report shows that the need to create these real-time, human experiences will not end when the pandemic does, but accelerate with new digital innovations. Brands that act now to solidify bonds with their customers through operationalized human experiences will ultimately drive lifetime value.”  

About the CMO Council

The Chief Marketing Officer (CMO) Council is the only global network of executives specifically dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council’s 16,000-plus members control approximately $1 trillion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 65,000 global executives in more than 110 countries covering multiple industries, segments and markets. For more information, visit https://www.cmocouncil.org.

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