Now you can track progress of your customer engagement efforts

BANGALORE, INDIA: Almost 80% of companies in any stage of digital transformation cite improving customer engagement as a priority.

“Improving customer engagement needs to be a thread woven throughout an organization. Customer Lifetime Value reflects how well that’s understood and if the right steps are being taken. The growing investments in digital transformation strategies make it even more critical for companies to quantify the outcome of their efforts to determine if they’re on track for success,” said Laurent Philonenko, SVP and CTO, Avaya.

"But the challenge many organizations have is actually quantifying the value of customer engagement and then determining the optimal mix of strategy, people, processes, culture, and technology in order to ensure that maximum Customer Lifetime Value," said Stephen Loynd, Global Program Director, Frost & Sullivan.

How do you calculate your CLV?

Customer Lifetime Value is the present value of all the future cash flows attributed to a customer relationship. It includes the projected amount of money the customer may spend and such items as the cost of new customer acquisition or savings from customer retention, the propensity of a customer to refer the company to others and the cost of their loyalty.

Measuring CLV is a challenge for many, however, and those that do often question whether they are getting an accurate picture. Among the challenges cited are: understanding what to track, incomplete data, onerous efforts needed for tracking, disjointed systems. A new research and calculator tool developed by Avaya and Frost & Sullivan helps companies determine how they are executing against their top priority. The CLV calculator  helps companies work through the areas and questions that can help them better understand what and how to measure.

The research shows that companies tracking CLV significantly outperform others in terms of profitability and growth. Against digital transformation initiatives, measuring CLV helps companies see how see that all decisions and actions are tied together and encourages a long-term look at the customer relationship rather than short-term quarterly impacts.

Successful CLV businesses placed the highest priority on the customer experience and brand and saw the contact center as the epicenter of managing the customer experience and responsible for ensuring long-term loyalty. Customer Experience Management drives higher Customer Engagement and Customer Lifetime Value because it helps improve customer satisfaction for better revenue potential, brand advocacy and longevity of relationship while reducing customer acquisition and support costs.

The three criteria to optimal CLV as indicated by the research are: an omni-channel customer experience; backed by enterprise-wide team engagement and access to actionable insight at all appropriate levels.