Customer Lifecycle Value

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Customer Regain

Management


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Regain Management

Customer acquisition and retention are

important and equally important is to regain a

lost customer.

It is all about winning a lost customer back.

Traditional methods depend on externaldatabases whereas in regain management it is

based on already existing customer data.


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Regain Management

Goal of customer regain management is to

reinitiate valuable customer relationships,

which have been already terminated.

Regain management has to detect such lost

customers, select valuable relationships and

attempt to regain them in an effective and

efficient way, for which a systematic process isnecessary.


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Sub-processes of Customer Regain

Management

Goals and

Strategies

Identification SegmentationDialogue

InitiationRegaining

Process

Control

Information base and exchange


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Customers regain goals and strategy

development

Defined on a top level and then broken downgiving measurable goals and objectives for singleprocesses.

Reactivates terminated customer relationshipsand pursues profits in most of the cases.

Also helps to prevent negative image spread bythe lost customer.

Collects information on termination process andpatterns, serves as a basis for future course ofaction.


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Identification

In order to regain lost customers, first

terminated relationships have to be identified.

External termination with direct expression.

Internal termination without direct

expression.

Some mechanisms have to be implemented todetect the internal termination cases.


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Segmentation

Segmentation can be based on:

Profitability potential (profitability-oriented

customer segmentation)

Regaining probability (success-oriented customer

segmentation).


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Profitability oriented segmentation

ABC analyses

scoring models (evaluation by means of several

weighted criteria)

customer-lifetime-value calculations

(considerations of future contributions).

Success-oriented segmentation Based on the probability of regaining the

customer.


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Dialogue initiation

After the problem identification and

segmentation the dialogue can be initiated.

It can be in any form..written, oral (call-centre)

or any other customised form.


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Regaining

Regaining offers are made.

Previous faults should be avoided.

Only if the customers assume anenhancement of the relationship they will be

willing to reinitiate the former relationship.


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Process control

Efficiency and Effectiveness Management.

Effectiveness could be measured by the ratiobetween the number of re-activated relationships

and the targeted or contacted customers. Efficiency could be calculated as the ratio of

regaining costs (costs of identification,segmenting, dialogue initiation, progress control

and regaining offers) and the actual regainingbenefits (actual customer value, quantifiedcommunication and information benefits).


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Regain Management with CRM

Cleartrip

In the morning a person spent 20 minuteslooking for trains. Even after finding a train, he

couldnt book tickets due to excessive serverload at cleartrip.

So he closed the window and resumed his

work.20 minutes later, he gets an email fromCleartrip folks with this message.


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Customer

Life

Cycle

(CLC)


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CLC

Customer Life Cycle is the journey of the

customer from getting attention to becoming

a customer and finally being retained and

associated for a long time with an

organisation.

With the CLC approach, organisations look

forward not only to selling, but try to manageeach and every interaction and touch point.


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Phases of CLC

Reach

Acquisition

Conversion Retention

Defection

Marketing Strategies related to CLC


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Customer Lifetime Value (CLV)

CLV is the present value of all future purchases

made by the customer minus the costs

incurred by the company.

Also known as CLTV or LTV.


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What are your customers worth?

S = average revenue per customersale

C = costs of servicing customer

V = expected # sales per year

Y = expected # years customer willuse your services

A = cost of acquiring new customer

N = # of referrals from customer

F = correction factor

Lifetime Value ofCustomer(CLV)

=[(S-C)*(V*Y)-A+(A*N)]*F

OR Margin * # sales cost of

acquisition + savings from referrals

* correction factor

Customer Lifetime Value = CLV


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What are your customers worth?

S = average revenue per customerper sale

C = costs of servicing customer

V = expected # sales per year

Y = expected # years customer willuse your services

A = cost of acquiring new customer

N = # of referrals from customer

F = correction factor

S = Rs. 20,000

C = Rs. 5,000

V = 2

Y = 5

A = Rs. 1500

N = 4

F = 1.2

CLV = [(Rs.20000-Rs.5000)*(2*5)-Rs.1500+(1500*4)]*1.2

CLV = Rs.185,400

Customer Lifetime Value = CLV


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Applications of CLV

Allocation of resources

Customer Selection

Segmentation

Merger and Acquisition

Customer Equity

Marketing Campaigns

CLV Based Loyalty Programmes

Purchase Sequence Analysis


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Assignment

Prepared a detailed comparative analysis of

the marketing strategies adopted during reach

and retention phases of CLC by a DTH

company in India. Also, prepare a metrics

containing the indicators which can be used to

measure the success of these marketing

strategies.


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Submit your assignments on

[email protected]

By 14th August, 2012.

Subject: CRM Assignment Roll No.Mention your name and your roll number clearly in the

assignment. No two assignments should be the same.
mailto:[email protected]:[email protected]

Documents

Customer Lifecycle Value