I just read an interesting article in the Harvard Business Review. It was by Michael Schrage who wrote the book, “Who Do You Want Your Customer to Become?” It was about Customer Lifetime Value or CLV. I was drawn to it because CLV is a metric we often use when we ask clients to invest in our stations as underwriters. We want them to give us credit when we bring them new customers not just for the one purchase they make today, but all the purchases they will make in their lifetimes.
As I read it I realized that it was something that could apply to corporate support in a different way. Turn it around and ask yourselves what is the CLV of your client/underwriters? How much have your top 10 clients invested in your station in the past five years? Will they continue to invest at that same level in the coming five years?
Most of us accept that attrition of somewhere between 25-30% is normal and we just kind of shrug when it happens. What if that level of attrition didn’t need to happen? Imagine how much differently our salespeople could spend their time!
Schrage’s book's main point was that making customers better makes better customers. While satisfying our clients and meeting their needs remain important, they’re not enough for a lifetime. And so, we have attrition.
By innovating and bringing real value to our clients, we are investing in their capabilities to serve their clients. And that, he argues, should increase their value to us.
When we add arrows to our quiver such as digital, podcasts, event sponsorship, social media, and native advertising, we are increasing our capability to deepen our relationships with our clients. By strategizing internally and collaboratively we can offer new ways for our clients to communicate better about what they do best.
How many of us spend real time thinking about our largest client’s needs? How many of us know what their CLV is? How can we help them to increase that value? How can we partner more effectively with them? If you take a few minutes to think about it, I bet your mind will kick into gear and become more creative in helping your clients succeed in ways you hadn’t thought of before.
Schrage concludes, “The best investment you can make in measuring customer lifetime value is to make sure you’re investing in your customers’ lifetime value.”