It’s great when an advertising campaign brings new customers into your store. But which customers represent the greatest value over the long run?
“Your customers aren’t just worth the amount of money they spend on your business today. They have future value, if you’re able to retain them.”
That is the message Laura Khoury will present at a Home Furnishings Association seminar titled, “How increasing customer lifetime value fuels revenue growth.” Khoury, CEO of Shoptelligence, will speak at 9 a.m. Tuesday, Jan. 28, in the HFA’s Resource Center, B1050, at Las Vegas Market.
Shoptelligence, an HFA Solution Partner, defines customer lifetime value as “the total revenue you can expect one customer to generate over the course of their relationship with your company. The longer a customer continues to purchase from you, the greater their lifetime value becomes.”
Retention gains produce bigger profits
One key to increasing customer value is decreasing acquisition costs for each customer. Acquiring a new customer – through that ad campaign, for example – can cost anywhere from five to 25 times more than it costs to retain an existing customer, Shoptelligence says, citing the Harvard Business Review. Along those lines, a Bain & Company study found that just a 5 percent increase in customer retention can generate growth in profit of 25 percent or more.
“It’s critical that you identify and nurture your most valuable customers, those who interact with your products and company,” Denise Mahnick, Shoptelligence co-founder and vice president of industry relations, says. “By doing so, you gain more total revenue.”
Shoptelligence is an AI-powered virtual designer that engages shoppers across all channels. Its platform is proven to increase sales and revenue per buyer. Now it is turning its attention to helping retailers build enduring relationships with their best customers. Data compiled over six months to a year lets Shoptelligence predict solid growth in customer lifetime value, Mahnick says.
In her seminar, Khoury will explore best practices for increasing customer satisfaction across digital and in-store experiences and maximizing positive interactions to gain customers for life.
The HFA Resource Center is the retailer’s one-stop shop for education, networking, connecting with service providers – and enjoying food and drink.