The customer lifetime value score is real and it definitely helps to determine how people are treated when they need help or have a problem…
Turns out, there’s a reason some people can call a company to voice their concerns and get the royal treatment. While others with the same problem can call the same place and suffer through long holds only to find no solutions.
Secret Customer Lifetime Value Score Revealed
It’s not the thing of imagination, either. This is real and it’s called a “customer lifetime value score” or CLV, according to a report by The Wall Street Journal.
Peter Fader is a marketing professor at the University of Pennsylvania’s Wharton School. And, he’s got a way to deal with customers who aren’t exactly easy to deal with. Fader pioneered the system. It’s based on previous purchases, customer interactions, and many more considerations.
The customer lifetime value score all comes down to a few essential elements. (There are actually as many as hundreds of metrics but are all focused around a few core factors.)
And, none of these come as a surprise. Customers who complain little (and/or are easy to deal with when issues arise), have good spending track records, and display good dispositions rank high. Conversely, cheapskate personalities, who are impatient and rude, rank low.
What’s more, CLV scores are practically everywhere: airlines, retail, credit card companies, banks, wireless carriers, internet providers, streaming services, and many more. In fact, a substantial percentage of companies have their own scoring system or use one based on another model.
The WSJ notes:
“Many (companies) say the scores make them more comfortable offering costly services and products in the short term because they are confident they will pick up more business in the long term. Some say they aim to increase each customer’s lifetime value by encouraging repeat business.”
The scores are also calculated using social media profiles, through third-party data brokers, and more sources.
“In some respects, the scores are just a high-tech version of what shopkeepers have done for generations—make judgments on a customer’s value based on how they look or behave.”