Ecommerce Customer Lifetime Value

Do you understand exactly which customers drive revenue and profit for your business? Can you attach a dollar value to each and every one of them? If you knew these things, how can you use that information to improve how you spend your limited marketing dollars?

Customer-Based Corporate Valuation (CBCV) is a proprietary analytical method used by Theta Equity Partners that turns raw transaction data into incredible insights about the worth of your customers.

Customer Lifetime Value, Residual Lifetime Value

When you understand exactly where your revenues are coming from, it tends to give you new focus in how you spread your marketing dollars.

CLV Acquisition By ChannelThere are numerous applications of CBCV, but for most of our clients, Marketing Mix Modeling is the one that yields the highest immediate rate of return.

MMM is by far not the only use case when it comes to this data. One doesn’t have to look far to see the amazing results companies have achieved by truly knowing the worth of their customers*:

  • Customer Engagement: Normal Amazon customers spend $790 per year, whereas Amazon Prime members spend $1,340 annually, a 69% increase.
  • Loyalty: U.S. Auto parts increased its spend per member by 20%, its repurchase rate by 14%, and its enrollment rate by 45% after implementing increased rewards for high-margin products, a status tier, and many other investments into their existing customers.
  • Store Policy: Zappos learned that people who regularly return items can be some of your best customers. The highest spenders and most profitable customers also have a 50% return rate. So Zappos has a 365-day returns policy, free two-way shipping and doesn’t charge for returns.
  • Customer Service: Hear and Play Music used this information for their Customer Service System. They now send out  automated messages that have a personalized tone to high value prospect. This has lead the company to see a 416% increase in CLV.
  • Product Development: EA has used it as parts of their Product Development Strategy for game like Anthem, Apex Legends and Battlefield V. This has been a large part of the incredible success these games. Anthem  for example was the highest selling game in February, and while the sales for Battlefield V have tempered down by now it was a world-wide success after its release.

*These results are not specifically related to CBCV, but with general CLV