Using customer lifetime values for fun and profit

While you have to be careful averaging customer lifetime values (CLTV), they can be very useful when you keep them associated with the individual customer.

Knowing how much each customer has spent is a great way of segmenting. Customers who spend a lot will tend to share behavior, while same as customers who spend very little also share (different) behavior.

RFM analysis uses this information as part of the Monetary factor which Repeat Customer Insights segments into 5 equal-sized groups (e.g. 5's are the most, 1's are the lowest).

There are dozens of ideas to use CLTV-based segmenting in your marketing.

Though CLTV alone usually isn't enough to get a full picture of a customer's behavior. Which is why RFM and Repeat Customer Insights evaluate other factors too.

There's a huge difference between a customer who placed a couple $2,000 orders compared to one who has placed 100x $40 orders.

Eric Davis

Leaky funnel losing repeat customers?

Are you struggling to grow your repeat purchases? Install Repeat Customer Insights to equip your store with the insights it needs to increase your repeat sales.

Learn more

Topics: Customer lifetime value Rfm

Would you like a daily tip about Shopify?

Each tip includes a way to improve your store: customer analysis, analytics, customer acquisition, CRO... plus plenty of puns and amazing alliterations.