Among the most advanced golf clubs who invest heavily in customer experience measurement, I often hear about the usage of NPS (net promoter score).
Unfortunately, there are fewer words about the importance of customer lifetime value.
This fact is really sad because this KPI is most indicative of the effectiveness of your golf club’s customer experience (CX) strategy.
For this reason, I thought to dedicate this post to the understanding of the importance and value of customer lifetime value.
According to the book Marketing Metrics, businesses have a 60 to 70% chance of selling to an existing customer while the probability of selling to a new prospect is only 5% to 20%.
Right at the beginning, it is good to highlight we should calculate from now on the more customer-focused metrics like customer lifetime value.
The customer lifetime value is a predictive indicator that aims to quantify the total worth of a customer over their entire relationship with your golf club.
It is a very good way to maximize the efficiency of your customer experience development efforts.
We like to put extra efforts into the NPS score or the CSAT score improvement. However, these scores will only show you a single customer interaction that is only one moment within a customer journey.
To succeed, we should implement the customer journey-based approach.
Customer lifetime value will also help you to demonstrate the economic value of your investment. At the same time, we should view CLV in terms of the value of the customer.
If you need to convince the management and the owners about further investments with CLV figures you can have a data-driven conversation.
Your success relies on how much you understand and able to utilize customer lifetime value.
The customer lifetime value depends on:
- the average customer lifespan (is the amount of time in which golf club member or guest purchases service from you) = 1/churn rate;
- an estimate of future profits.
Since it is based on historical data it will help you to predict future revenues and profit.
Don’t stop at finding your golf club members’ and guests’ CLV. Dive deeper and figure out what behaviors have the biggest influence on customer lifetime value.
Personalization is one of the main tactics used by companies looking to increase CLV. It also drives the emotional connection with the guests. Emotional connection drives loyalty.
Personalization is also one of the 4 main expectations from a successful customer experience strategy:
- Empowered employees.
Another great technique to improve customer lifetime value is creating buyer personas. It will also help you to understand your golf club members’ and guests’ needs, expectations, and goals.
By creating buyer personas, you will know:
- who you are trying to communicate with;
- insights for prospecting;
- buying behaviors;
- who to focus on.
Finally, you should spare no efforts on your new golf club members’ onboarding process. The first impressions, first experiences with your golf club matter a lot that can lead to sustainable business growth.
Here you can find a customer lifetime value calculator.