What are your thoughts on this response? As we learned, Cus
What are your thoughts on this response? As we learned, Customer… What are your thoughts on this response? As we learned, Customer Lifetime Value (CLV) helps marketers better understand how well they are resonating with their audience, how much customers like products or services and areas of improvement (Cole et al., 2019). Essentially CLV is the average amount of money customers will spend with a business over the entire life of the relationship (Cole et al., 2019).Maximizing CLVTo maximize a CLV score, marketers should focus on customer retention. This is the percent of customers that remain loyal each year. According to the data, it costs five times as much to attract a new customer (customer acquisition rate), then to keep an existing one (customer retention) (Saleh, 2019). Additionally, the probability of selling something to an existing customer is 60-70%, while the probability of selling to a new customer or prospect is only 5-20% (Saleh, 2019). Since the probability of selling to an existing customer is 60-70%, one could infer that increasing customer retention will increase profits. Specifically, one article stated, “Increasing customer retention rates by 5% increases profits by 25% to 95%” (Saleh, 2019). With that statistic in mind, focus on customer retention not only improves customer retention, but also positively impacts annual customer profit. When increased, both components drive a higher CLV score.The most effective digital marketing tactics for driving customer retention include email marketing, social media marketing, content marketing and referral marketing. All these tactics can be leveraged interchangeably to drive retention that in return will help maximize the CLV score.Organization CLV ApplicationMidmark is an equipment manufacturer in the medical, dental, and animal health markets. In animal health, the equipment is mainly sold through distribution. Since Midmark has a comprehensive portfolio of animal health equipment (anesthesia, monitoring, boarding and containment, tables, cabinetry and so on) as well as clinical design expertise, Midmark can work directly with end users on new build hospitals or remodel projects. For customer acquisition on new build or remodel projects, Midmark offers distributor sales reps an attractive monetary value (customer acquisition cost) when they bring their Midmark sales rep into the project early and the deal is closed. In some cases, the single customer acquisition can multiply if that customer is building multiple hospitals or clinics. This would only be a one-time acquisition cost. By driving customer acquisition on a project, it provides Midmark sales reps access to sell the customer the entire portfolio of products. When customers buy into the “one stop shop”, it drives customer retention for ancillary product, service, or training purchases and in some cases future builds.For more one-off product purchases, Midmark leverages Google Advertising paid search and display ads to drive new leads (customer acquisitions) into the sales funnel. Ads are monitored closely to ensure the customer acquisition costs are resulting in desirable ROI. If our customer acquisition costs are over benchmark, adjustments will be made to the campaign to improve efficiency or funds will be allocated in other areas for customer acquisition. Reducing customer acquisition costs will help improve the CLV score. Arts & Humanities Communications Marketing MKT 622
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