Marketing Essay Sample on Customer Lifetime Value

Published: 2019-05-23
Marketing Essay Sample on Customer Lifetime Value
Type of paper:  Essay
Categories:  Marketing Customer service
Pages: 3
Wordcount: 601 words
6 min read

Customer Lifetime Value (CLV) is defined as the predictable returns or profit resulting from a future relationship with a customer. CLV reflects the company's view of the value each customer brings to the company during the entire duration of the relationship between customer and the company. CLV plays a key role in steering marketing efforts. It enables the marketing team to do informed sales campaigns to sell deeper and wider into their strong customer base. This measure can be used by the company to accord differential treatment hence improving their loyalty. The CLV metric guides the company in selecting high value customers and focus on marketing investments on them.

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There are situations where a company should focus on CLV to strengthen relationships. Today, user communities are popping up daily to meet the demand for communication as well as the sense of community. The company can target customers on this platform and utilize the technology to cultivate relationships with customers. Growing companies with targets to increase R & D require customer input during the design processes hence the need to focus on CLV. Depending on the dynamics of products and service, companies can consider to have less attention on the current sales and focus on CLV more.

CLV can be used to determine less profitable customers. In this situation, customer retention and focus on CLV will not be important. The organization can use new strategies to acquire new customers who are more promising instead of trying to retain the unprofitable ones. Competition is inevitable and if some customers push for deals that will lead to the company loosing, they can be let to go and get options as the company focuses on its new and potential rewarding ones.

Database Marketing and CRM

Database marketing refers to direct marketing where databases of current and potential customers are used to generate communications that are personalized in attempt to promote products and services. Customer relationship management (CRM) is a strategy to manage the companys interactions with its current, potential, and future customers using technology, customer service, technical support, sales, and marketing. A significant advantage of using database marketing is knowledge that customers you are targeting have already used or expressed interest in your product or service. This significantly improves the rate of response compared to traditional mail marketing. CRM makes data available to the company. The information allows it to target specific customers based on their buying behaviors. This ensures that customers get products and services they need in a timely manner.

A major disadvantage of database marketing is the probability to alienate potential customers. Also, customers have tendency to protect personal information and data about themselves. It can, therefore, pay to reach effort to mask the nature of campaign to use and the means of getting customer contact information. Another advantage is the need to regularly update the databases lest some contacts get lost. The management has the challenge to consistently train new staff on how to use the CRM systems to interact with current and potential customers. Some employees might not see the importance of using CRM systems, therefore, giving hard time to the management in dealing with the resistance.


The theories covered are relevant and strongly related to my organization. The company measures customer satisfaction through feedback. The process is effective since most of the organizations customers are technologically ahead and online communities form a platform for effective communication. The company responds to and attends to customers feedback to improve the services offered. The company can engage clients the R & D process as a strategy to improve customer satisfaction.

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Marketing Essay Sample on Customer Lifetime Value. (2019, May 23). Retrieved from

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