Customer Lifetime metric being used more: But skills gap a deterrent
Criteo the advertising platform for the open Internet, today reveals that despite growing awareness of Customer Lifetime Value (CLV), a lack of digital skills, customer data, and organisational silos are holding back its use as an actionable business metric.
In its 2019 report, Is ROI dead? The state of Customer Lifetime Value 2019, Criteo benchmarks CLV awareness and adoption over the last 12 months. The study reveals a significant increase in marketers who have a high awareness of CLV (43% in 2019 vs. 34% in our 2018 survey) and in organisational efforts to monitor CLV (32% vs 24%).
However, the study also highlights three major data, business, and skills gaps that hold organisations back from making CLV an actionable metric. Firstly, a lack of understanding within the business typically manifesting as an inability to bring all stakeholders on board with the measure; second, challenges around finding and using the data necessary for a complete picture of CLV, and third, a struggle to retain the appropriate in-house talent to operationalise the measure.
“The adoption of CLV reflects an important shift in the way businesses look at customer relationships, from short-term profits to long-term sustainable relationship. The truth is, for many marketers, ROI is no longer fit for purpose. The study shows that the industry is looking for a more sophisticated metric that gives businesses a deeper understanding of their customer relationships and their value over time,” says Elizabeth Brennan, Director Account Strategy & Sales, UK, Criteo.
In addition, the findings show an encouraging level of agreement on the benefits organisations gain by using CLV including increased customer retention (64%), gaining more sales (59%) and greater brand loyalty (58%). CLV has emerged a key strategy for driving loyalty, an area that remains a battleground for UK brands according to Criteo’s “Why We Buy” survey conducted at the same time. The survey revealed 64% of shoppers are willing to consider new brands, with “value for money (63%), product selection (43%), customer service (44%) and low prices (43%) the most prevalent reasons for consideration.