Calculating customer lifetime value is 1 of 6 customer experience management success factors. It motivates executives and prioritizes employee engagement in differentiating customer experience. See https://ClearAction.com

1. Customer Lifetime Value
Motivate Executive & Employee Engagement
in Prioritized Customer Experience Improvement & Innovation
1
LYNN HUNSAKER
CHIEF CUSTOMER OFFICER

2. ClearAction Continuum
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 $5,000 Annual revenue per customer
 10% Company profit margin
 2 Average # of loyal years
 $1,000 Customer Lifetime Value ($5,000 x 10% x 2)
As long as the cost is less than the CLV, the company should invest
 $300 Cost of average sales call (salary, commission, benefits, expenses)
 4 Average # of sales calls to convert prospect into a customer
 $1,200 Cost of attracting a new customer ($300 x 4)
 PLUS cost of advertising and promotion ÷ # new customers (+ overhead)
Company is spending more to attract new customers than their lifetime value
 bankruptcy!
A Practical Use of CLV

3. ClearAction Continuum
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CLV Myths
• Long-term customers purchase more
• Long-term customers are more desirable than short-term customers
• Share of wallet increases as customer lifetime increases
• Customer share-of-wallet is driven by increasing customer loyalty
• Loyal customer are less sensitive
• Loyal customers cost less to service than non-loyal customers
• Loyal customers are always profitable customers
• Customer satisfaction brings customer loyalty
• Customer revenue is a good predictor of profitability
♦ Loyalty Myths – Keiningham, Vavra, Aksoy, Wallard ♦

4. ClearAction Continuum
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Sources of Revenue
𝐂𝐂𝐂𝐂𝐂𝐂 = �
𝑘𝑘=0
𝑛𝑛
Revenue − Costs
Repeat purchases
Price elasticity
Share of wallet
Upselling
Cross-selling
Word-of-mouth
Price x x Duration
♦ Converting Customer Value – Murphy, Burton, Gleaves, Kitshoff ♦

5. ClearAction Continuum
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Allocating Costs
Gross profit contribution
Partial overhead allocation
Customer-related cost allocation
Full allocation of customer costs
• Averages:
• Accounts:
Customer profitability analysis:
allocation of costs & revenues to specific customers
♦ Converting Customer Value – Murphy, Burton, Gleaves, Kitshoff ♦

6. ClearAction Continuum
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CLV Visualization & Strategies
♦ Converting Customer Value – Murphy, Burton, Gleaves, Kitshoff ♦
Profit ($)
Customers
Most
profitable
Least
profitable
Customers
Profit ($)
Bottom-line profitability
Cumulative profitability curve for
all customers
1) Reduce cost to acquire new customers
2) Cross-sell and up-sell effectively
3) Increase customer lifetime
4) Reduce relationship costs
5) Reduce servicing costs

7. ClearAction Continuum
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ClearAction Continuum
7
See the rest of this presentation in
 GETTING & KEEPING CUSTOMERS
 DRIVING GROWTH & INNOVATION
 DATA & METRICS THAT WORK
 CREATIVITY WITHIN BOUNDARIES
 DRIVING ACCOUNTABILITY & COMMITMENT
 GETTING EVERYONE ON THE SAME PAGE
Join today:
https://ClearAction.com/value-exchange
Ask for a demo:
Success@ClearAction.com

8. ClearAction ContinuumClearAction Continuum
8
Increase: Maximize: Decrease:
• Follow-through
• Ability to prioritize
• Productivity of resources
• Employee engagement
• Strategic vs. tactical work
• Resource acquisition
• Stakeholder satisfaction
• Stakeholder cooperation
• Team collaboration
• Right the first time
• Job satisfaction
• Continuity
• Project stalls
• Duplicated resources
• Redundant efforts
• Rework
• Employee turnover
• Alliance workloadAlignment (bridging silos) is the
next frontier in CX ROI
Design of ClearAction Value Exchange based on research with American Express, Aon, Apple, Ariba,
Clorox, Covidien, Eli Lilly, Global Foundries, HP, Microsoft, NVIDIA, SAP and beta-testing with many others
ClearAction Value Exchange KPIs are multipliers on your CX investments
SaaS for real-time
personalized action plans
to tackle these silos
30-minute bites
AI-curated resources
DIY and interactive
VP-level to intern-level
Shared vision
Collective capability
© 2019 ClearAction Continuum.

9. ClearAction Continuum
ClearAction Continuum closes the brand-customer gap.
ClearAction Value Exchange members in marketing
& customer experience, care & success roles access
real-time, 24x7, bite-sized personal solutions to
navigate silos for customer value performance
ClearAction Advisory clients strategically
operationalize marketing & customer experience
for scalability, resource productivity & enduring
customer value performance
99
Customer value performance momentum
© 2019 ClearAction Continuum.
ClearAction Continuum

10. ClearAction Continuum
Ask about customer value performance momentum
ClearAction Continuum
10
DNA MASTER PLAN™
STRATEGIC RENEWAL™
CLEARACTION VALUE EXCHANGE™
DNA ACTIVATION™
MARKET RESPONSIVENESS INDEX™
DX AGILITY™
DNA TRANSFORMATION™
DX ALTITUDE™
RACE™
(RAPID ANALYTICS CUSTOMER ENVIRONMENT)
VOX MODERNIZED™
VOX ACTIONABILITY™
SHARKTΛINK™
CX growth aspirations:
 Business results via trust-building
 Consistency via silo-bridging
 All-employee engagement
 Prevention and anticipation
 CX as managerial context
 Profit impact in daily decisions
https://clearaction.com/customer-centered-business-10-keys-organic-growth/© 2019 ClearAction Continuum.
Success@ClearAction.com

11. ClearAction Continuum
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ClearAction Continuum
We’re honored to influence these companies
PARTIAL LIST OF CLIENTS
© 2019 ClearAction Continuum.

12. ClearAction Continuum
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ClearAction Continuum
ClearAction clients’ experiences
Because each of the ClearAction
team members managed CX in B2B
for a number of years, they provided
personal examples and practical
tools that could be implemented right
away. It was incredibly beneficial for
us to work with them for several
occasions. They elevated our
collective knowledge and helped us
achieve a higher level of CX maturity.
– A. Chu, Dir Customer Experience
ClearAction is an expert in business
operations and has been an
invaluable resource for us to learn
best-practices in many areas. They
taught us things that would not
readily cross our minds, but after they
explain, it makes total sense, and this
increased our efficiency and
accuracy in many areas. I highly
recommend ClearAction.
– K. Van Diepen, Dir Marketing Communications
ClearAction has been at the forefront
of helping companies like ours
reduce chaos, maximize resources
and achieve impactful results.
They’ve provided mission-critical
guidance to begin the process of
building a strong marketing
operations function that supports our
company’s growth, scale and
continuous improvement objectives.
– K. Chalmers, Dir Marketing Operations
© 2019 ClearAction Continuum.

13. ClearAction Continuum
Customer value performance momentum