By customer lifetime value, do we mean – monetary contribution to our bottom line, brought to us – over time – by the average customer?
Or do we mean – the continuous incremental value we aim to deliver to a specific customer – day after day after day?
The former can be calculated, true …
but the latter will drive longterm relationship
& relationships drive value.
A thought stimulating idea, Dirk. Although I believe that the standard definition is more like Option A than B, I’m probably not the only one who heaps praise and loyalty on companies such as Nordstrom, CostCo LinkedIn, and I would add, BestBuy, simply because their innate orientation on customer satisfaction. As a result, whenever a price point is reasonably close, I choose to do business with one of these wonderful firms.
Another thought: Yelp. Yelp is transforming small businesses, one happy Yelp visitor at a time, forcing them to focus much harder on consistently satisfying customers, offer it’s podium for heaping praise in truly service-oriented organizations, and scorn on the others.
Who wins? Customers, of course! Who loses? Only businesses who reguse to evolve from the nasty habit of sticking it to customers, one at a time.
Okay, I’m changing my vote now. Option A and B are really the same!
Thank you, sir!
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Thanks Daniel. Although the idea is quite old. Come to think of it, isn’t this like Kennedy’s inauguration speech “ask not what your country can do for you, ask what you can do for your country”? – Replace country by customer and there you have it.
Credit to Ted Sorensen for wrting this up (https://en.wikipedia.org/wiki/Ted_Sorensen).
Ask not what your customer can do for you; ask what you can do for your customer. I feel like JFK already!
I just forwarded this thread to a coworker. It’s a big mental shift for those who have prospered for years in a purely transaction, arms-length marketplace.
My coworker being someone who is already championing this exact paradigm shift!
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