The customer lifetime value is an area that can and should be optimized to deliver maximum profitability for a business. It is based on the principle that it costs far less to market to your existing client base than it does to acquire new ones. Here are five tips that you can put to use and increase your overall ROI.

1. Determine customer lifetime value

Companies use a customer lifetime value analysis to evaluate growth. Subtract the lifetime revenue of customer by the cost of acquisition, operating expense, implementation, and delivery costs. A marketing ROI calculator, such as the one found at, can help. Once you know what these numbers are, you can move forward with a plan that includes measurable objectives to increase your profitability.

2. Prioritize customer satisfaction

Your customers are fundamental to your success. It’s important that in today’s competitive environment, overall satisfaction is a priority. Complaints have the potential do do far more damage than just losing a single client. Negative interactions can lead to a damaged reputation, particularly online.

3. Leverage online communities

Online forums and social networking sites play a prominent role in most marketing plans. It offers the opportunity to improve several components of the customer lifetime value . You can lower your acquisition costs, help bond the client to you, sell more, and manage client satisfaction levels. Be proactive about reaching out to customers before a problem starts.

4. Balance company resources with solving complaints

Hopefully, you have a plan that outlines how to identify issues and solve them quickly. Despite your best efforts, there will be that occasional customer that will reject your attempts to rectify a problem. The best way to avoid this situation is to look at customer lifetime value cycle as being broken into multiple steps: services or goods, fulfillment, assurance, marketing, and pricing. does this very well. By ensuring each encounter is positive through every step, you can avoid over-using your resources on any single client complaint.

5. Up-sell every transaction

It’s surprising how many companies tend to overlook the benefit of up-selling. Focus on increasing the total for each individual transaction and on getting your customer to visit more frequently. For example, veterinarians do this by splitting routine visits into six month intervals. The pet gets a wellness exam at each visit, and the client is encouraged to buy additional services- from vaccines and dental cleanings to blood work. The same principle is applicable to cross-selling goods.