Retail Marketing and Branding: A Definitive Guide to Maximizing ROI, 2nd Edition

CHAPTER 18

MAXIMIZING CUSTOMER VALUE WITH DATA-DRIVEN CLM

Lars Fiedler, Roland Harste, Jesko Perrey, Andrew Pickersgill

Like fine wines or vintage cars, customers become more valuable over time. But like other collector's items, they need special care as they mature. This is what customer lifecycle management, or CLM, is all about. CLM is the key that unlocks each customer's full value over the entire lifecycle from acquisition and development to retention – and, if need be, reacquisition or reactivation.

CLM-based activities comprise a wide variety of marketing vehicles, such as direct marketing campaigns, that unfold across multiple channels, e.g. online or at the POS. Typically, these activities aim to improve a retailer's performance in the later stages of the purchase funnel, especially conversion, repurchase, and loyalty. For example, CLM helps retailers ensure that high-value customers receive special attention and service. Generally, CLM enables retailers to use customer data to optimize their marketing investments, making it a direct driver of marketing ROI.

In this chapter, we will discuss the relevance of CLM for retailers and outline the “dos” and “don'ts” along the four steps of customer lifecycle management. Specifically, we will demonstrate that CLM is more than fancy math applied to optimize direct marketing campaigns. As we see it, CLM is a holistic way of thinking about quantified customer lifetime value (CLV) that can be applied to inform decisions about almost ...