Business Intelligence Solution to Improve Customer Lifetime Value
“What type of campaign should we focus on? Increasing client engagement? Building loyalty? Or simply sending more offers each week?”
Many marketers struggle with prioritization. Poor prioritization leads to messages remaining ignored by clients and a waste of marketing dollars that could be spent on campaigns that actually drive revenue.
If you’re also trying to increase client engagement, marketing analytics and tools like Power BI can provide invaluable support.
However many struggle with deriving insights from data:
“Why is this data so inconsistent?”
If you’re also interested in becoming data-driven, here’s an example of a business intelligence solution helping you make more informed decisions to improve customer lifetime value.
Report to Increase Customer Lifetime Value (CLTV)
If a customer spends $50 per purchase, makes 2 purchases annually, and stays loyal for 2 years, then:
CLTV = $50 x 4 x 5 = $1000.
Customer lifetime value = Average Order Value x Average Purchase Frequency x Customer Lifespan.
Which of these 3 factors – order value, purchase frequency, or customer lifespan – drive the most revenue in your organization? This report created in Power BI shows how business intelligence helps you answer these types of questions.
Customer Lifetime Value (CLTV) Drivers Report
The report works in the following way:
Data collection: Collects automatically data about purchase dates and products by each customer.
Data model. It calculates the value of each customer throughout its lifetime. Then, it analyses which products and client types drive the most value.
Here is how you can use such a report:
Identify Top Products: According to the top chart, the largest contributors to customer value are home and kitchen products, achieving a CLTV of $18,070.
Create measurable goals that drive revenue: The left bar chart shows a steep increase in customer lifetime value from $7.4k ($100-$150 orders) to over $30k ($200-$250 orders).
Analyze Key Drivers: The right bar chart shows that a lifespan of over 6 months significantly increases CLTV to over $20k.
This analysis, facilitated by Power BI and marketing analytics, allows the marketing team to create more campaigns targeting the most profitable products: home & kitchen. It also allowed them to build campaigns focused towards increasing the order value to over $200 per order, or extending the customer engagement beyond 6 months.
Want faster, smarter insights from your data?
Book a quick 30-minute call to explore how I can support your organization’s goals.