Customer lifetime value is a general estimate of how much a contact will spend in in your store in the future. To determine each person’s customer lifetime value, we look at their purchase history and compare it to what’s normal for your store.
In this article, you’ll learn about customer lifetime value and how to use this data to create targeted campaigns.
Things to Know
Here are some things to know about customer lifetime value.
- Depending on your plan and purchase data, you may not have access to customer lifetime value. To find out what features are included in each plan, check out our pricing page.
- To access the customer lifetime value segmentation criteria, you must have a connected store with enough data for us to categorize your customers.
About the Categories
Customer lifetime value can fall into 1 of 4 general categories: new, high, moderate, and low.
Here’s an overview of what each category indicates about your customers.
|Customer Lifetime Value||Customer Characteristics|
|High||Customers whose predicted future spend is high.|
|Moderate||Customers whose predicted future spend amount is moderate.|
|Low||Customers whose predicted future spend amount is low.|
To determine a customer’s lifetime value, we do some math on our end to compare averages for your store to a few customer-specific variables:
- Spend amount
Measures how much money a person has spent in your connected online store.
- Customer age
How long a person has been a customer, or the amount of time since their first purchase.
- Time between first and last purchase
The time between a customer’s first purchase and their most recent, or last, purchase.
- Time since most recent purchase
The time since a customer last made a purchase from your store.
- Frequency How many times a customer made a purchase.
We take all of these variables into consideration to make a prediction about each customer. Over time, customers can move between categories based on these different variables.
View Customer Lifetime Value
You’ll find a summary of your contacts' customer lifetime value on your audience dashboard. Customer lifetime value is also available to use in custom segments.
Navigate to the Audience tab to see an overview of your contacts' customer lifetime value. From there, click any customer lifetime value segment you want to target, and we'll help you start a new campaign.
Use customer lifetime value in custom segments to organize your audience and send targeted campaigns.
You can create a custom segment from the contact table or various campaign builders.