Ever heard these pearls of wisdom?
- It takes a certain level of maturity to nurture and sustain a relationship.
- The rewards of a lasting relationship are far greater than the investment it requires.
The same is true in business. Companies at the highest levels of revenue growth maturity are great at closing sales. Making clients happy. Keeping them loyal. And enticing them to spend more over time. The more these customers spend, the higher their lifetime value (CLTV).
CLTV is the secret to strong, predictable revenue growth. As CLTV grows, customer acquisition cost (CAC) shrinks. And profits rise. In fact, a 30% reduction in CAC adds more than 10% to the bottom line.
Below, we’ll delve into the advantages and characteristics of a high CLTV. Then we’ll explain how you can achieve the same.
High-CLTV companies make quantum leaps in innovation and growth. Without the quarterly mad dash.
Customer Lifetime Value (CLTV): Your Revenue Growth Advantage:
Among the many B2B companies we studied last year, only 9% have achieved an optimal CLTV. But those that have, make quantum leaps in innovation and growth. Without the quarterly mad dash.
Each subsequent year, it becomes easier for these companies to attain their revenue growth objective. In 2014, 96% of high-CLTV companies exceeded top-line performance. (See page 15 of our annual research report, Make Your Number in 2016. You can download it here for free.)
High-CLTV companies are adept at identifying and meeting customers’ needs. Not just initially, but on an ongoing basis. Existing customers, who are already familiar with the company, need less convincing. The company knows its customers well, too, making upselling and cross selling easier. The end results: a shorter sales cycle and a more predictable pipeline.
The High-CLTV Customer Experience:
Do you have what it takes to build a loyal customer base? Here’s how high-CLTV companies—level 5 of the Revenue Growth Maturity Model—do it. (And do it with ease.)
Streamlined Sales and Service Experiences:
Disruptive Product/Service Offerings:
The company is proactive, innovative, and quick to adapt to changing market demands.
Customer relationships are cultivated well after the sale. Follow-up content is delivered where and when reps and customers need it.
How to Grow Your CLTV:
We break down the necessary steps in our annual research report. Make Your Number in 2016 outlines the five levels of revenue growth maturity. The benefits of rising through the levels. And a proven methodology for getting there. It’s a free download—and a great place to start.
Once you have the report in hand, take the first steps to unleashing your CLTV.
- Measure your maturity. Do you merely react to changing market conditions? Do your functional teams undermine or enhance each other’s efforts? What are your prospects and customers saying about you?
- Start from the top. You can’t progress until you clearly define your corporate strategy.
- Get everyone on board. Focus on building a cohesive leadership team.
- Move to execute. Your functional strategies must reflect your corporate strategy in order to advance it. Key is to develop your functional strategies in the right order, and in the right way. We detail this six-step methodology in our report, beginning on page 26.
What’s Next? You need to decide whether your organization should stay the course or make a change. Climbing the Revenue Growth Maturity Model has its risks. We’ll discuss those more in tomorrow’s post