{"id":92268,"date":"2024-06-11T09:14:28","date_gmt":"2024-06-11T16:14:28","guid":{"rendered":"https:\/\/zetaglobal.com\/?post_type=insight&p=92268"},"modified":"2025-04-17T10:58:58","modified_gmt":"2025-04-17T17:58:58","slug":"companies-underutilize-customer-lifetime-value","status":"publish","type":"insight","link":"https:\/\/zetaglobal.com\/resource-center\/companies-underutilize-customer-lifetime-value\/","title":{"rendered":"The Strategic Gap: How Companies Underutilize Customer Lifetime Value\u00a0"},"content":{"rendered":"\t\t
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\n\t\t\t\t\tThe Strategic Gap: How Companies Underutilize Customer Lifetime Value<\/strong>\t\t\t\t<\/h1>\n\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
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Customer lifetime value (CLV) quantifies the revenue or profit a business can expect from a customer over the course of their relationship. It\u2019s a crucial business metric for decision-making and forecasting.<\/p>

Traditionally viewed as a retrospective metric, CLV has predominantly been used to assess past customer behaviors and spending. Marketers prioritized acquisition costs, conversion rates, and revenue, but haven\u2019t looked to predict actual customer value over time.<\/p>

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But the landscape is shifting. With an increasing need for cross-departmental integration involving sales, services, data science, and finance, organizations are now adopting a forward-looking approach to leverage CLV more strategically.<\/p>

Recent research we commissioned from Forrester reveals a noteworthy gap: while 81% of organizations track CLV, only 37% use these insights strategically, and a mere 14% evaluate customers based on key metrics, shares them across lines of business and factor them into forward-looking profit metrics.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The research uncovered a significant disconnect in how organizations leverage CLV and highlights an evolutionary trend in marketing\u2019s approach to customer value metrics.<\/p>\n

The Data and Strategy Gaps<\/h2>\n

Despite the critical importance of CLV, many organizations struggle to effectively utilize this metric in operational strategies. Around half of respondents do not feel enabled to achieve the goal of optimizing business objectives based on key customer metrics.\u00a0<\/p>\n

The gap is in how data is collected and leveraged to inform forward-looking decisions that drive customer engagement and business growth.<\/p>\n

While most organizations collect data around CLV, it isn\u2019t being shared and used in strategic decision-making. Many also lack a common definition of \u201cvalue\u201d and understanding of what makes a customer valuable. This leads to an underutilized potential in shaping customer behaviors and preferences\u2014a future where marketing could pivot from purely predictive to influential.<\/p>\n

53% of respondents anticipate that marketing will have more influence on business strategy\u2014and be more effective \u2014 as more teams apply forward-looking profit metrics to their customer value strategy.<\/p>\n

The study underscores the essential role of technological integration and alignment within the marketing technology ecosystem to drive business outcomes, as affirmed by 83% of survey participants who said martech integration is \u201chighly\u201d or \u201ccritically\u201d important to long-term success. But only 19% said their organization is fully aligned across functions.<\/p>\n

This points to an important gap. When equipped with the right data to successfully calculate and apply customer value, marketers can run more strategic and effective marketing programs, thus elevating their team\u2019s influence across the organization.<\/p>\n

Benefits of Adopting Forward-Looking CLV<\/h2>\n

Over half of the leaders surveyed anticipate that prioritizing future-looking, predictive value metrics will not only enhance marketing’s role but also improve its overall impact significantly. Specifically, respondents expect a variety of benefits from applying profit metrics to their customer value strategy:<\/p>\n