Register now or log in to join your professional community.
This paradigm of Customer Life Time Value is as dynamic as the Retail business, it has its own significance in relation to the specific business, brand, location etc, which help in determining how much a customer relationship is worth over a period of time. This is my interpretation based on the experience, the book definition is certainly different and it should act like a base to form our individual opinion.
CLTV helps in determining customer acquisition process, but a lot depends on the quality of information we collect about our customers to determine the CLTV. Different valuations are required for customers with different characteristics. I feel the most important thing is to influence the behavior of the customer to upgrade the LTV. Theoretically it may look difficult but it is easily accomplished due to the basic (of course apart from our efforts) reason that the customer's net worth also increases over a period of time, which also compliments our efforts.
we all know formula for calculating CLV is like. Customer lifetime value ($) = Margin ($) * (Retention Rate (%) ÷ [1 + Discount Rate (%) - Retention Rate (%)]). Now real job is how to calculate Retention rate specific to dubai retail market. as we know dubai market is heavily dependent on tourist , in201254 million ppl visited Dubai mall and11 million tourist visited dubai. it means there are huge no of local customers as well. Now calculating exact no of retention rate is highly dependent of industry and location, if you are located in dubai mall then retention rate would be different from ibn e batuta mall.
Now regarding you question and keeping above analaysis in mind long term ll be better choice.
"Customer Life Time Value" is the cost benefit analysis on a given customer for a given period; especially in the case of Managing Large Number of Customers in Professional Establishments like Star Hotels, Precious Jewel Shops, Speciality Garment Outlets,........
They value each customer by keeping data personal wise, all the time and improve their level of service for those who maintain regular visits or make sizable purchases.
A periodic calculation and reference of the Index on a particular customer provide the Management Team how to give Weight -age on Service.
The improvement in the "Customer Life Time Value Index" can create wonders, basically because they are High Class Customers with Repeat Purchases and increase in the Value of Purchase every time they visit the Shop. (Improvement can be made by level of Quality of Service Provided)
The Well served customers act as brand ambassadors for their business, naturally bring their circle close to the shop.
A typical method-innovative one lessen the Advertisement cost....advantages are many.
I like the answers given a lot, however, I would like to point out that many brands are multinational ones, in that case, the shopping experience has to be consistent in all the markets because good or bad practices locally can affect the business globally (specially if the first purchase of the customer in that particular brand) This is dramatically important in the food chains industry!
I agree with Answer added by:
Madhusudan Rao Sriperambuduru
Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.
