Do you want to increase your customers’ lifetime value? Well, Six Sigma may be the solution. Six Sigma contains a plethora of powerful strategies to make your business more efficient and productive. One of the ways to bolster this is by increasing your customers’ lifetime value. Your business’s purpose, and indeed the purpose of all businesses, is to create a customer and grow them.
Customer lifetime value (CLV) is a metric that companies use to identify how much their customers are worth to them. You can calculate CLV by subtracting expenses from the total profit generated by your customer-company relationship. Knowing your CLV will allow you to cultivate loyalty from your customers, as well as re-attract them for further purchases. Six Sigma methodology can help you increase customer lifetime value by focusing on several key areas. Today we look at each of these areas so that you can maximize your customer lifetime value.
Long-Term Customer Relationships
You must practice three essential skills to build long-lasting customer relationships. Firstly, it’s important to maintain complete transparency. Six Sigma-oriented businesses do this very well because it ensures full cooperation between departments. It also allows you to identify problem areas, such as in production processes, so you can then correct them. Secondly, for business-to-business customer relationships, as well as consumer-based ones, sharing your skills will help improve your customers’ confidence in you. Whether you offer free maintenance or business advice, these incentives will ensure customers keep returning, helping increase customer lifetime value.
In Six Sigma, teamwork is important and effectively utilizing your value stream is essential to keeping your customers. Thirdly, you should be a partner to your clients. Ensure your relationship is mutually beneficial. This will help build trust between you and your clients, especially for business-to-business relationships. Utilize their products and services as they do yours, to forge strong relationships, and increase customer lifetime value. The more you cultivate this way of thinking about CLV, much like continuous improvement, the more you will see the benefit.
Cultivate Consumer Loyalty to Your Brand
Companies like Microsoft, Apple, Samsung, and Sony are all leaders in brand loyalty. They deliver consistently high-quality products and services, along with great customer service, and strong internal values to create consumer brand loyalty. You should follow their example if you want to maintain and increase your customer lifetime value. The more customers you have, the greater your CLV. But to maintain a strong and loyal consumer population, you have to give your customers reason to return.
Using Six Sigma and Lean, you can eliminate waste and variation, ensuring your products and services are without defect. You can also use techniques like value stream mapping and root cause analysis to determine what customers want and solve problems without difficulty.
Focus on Existing (and New) Customers
It’s important to attract new clientele through marketing of your services, but be careful not to lose touch with your existing customers. This is counter-productive, as only focusing on your new customers will mean your existing ones lose faith in the company. Every customer must feel valued. This will enable you to increase customer lifetime value for existing customers while cultivating it in new ones. In Six Sigma, speculation on what customers’ potential future demands might be is important, but remember to focus on your existing data first. You will start to see your customer loyalty, profitability, and marketing allowance increase over time.
No responses / comments so far.