From the analysis of customer behavior to profiling and advanced segmentation activities: real-time data represent a fundamental factor for the implementation of effective personalization activities and one of the most effective aspects for influencing the increase in customer value, i.e. their lifetime value.
But let’s take a step back, what do we mean by customer lifetime value (CLV)?
- Customer Lifetime Value: What’s Behind Every Customer?
- Real-Time Interaction Management, beyond CLV
- Customer Lifetime Value and Real-Time Interaction Management: the people-based approach wins
Customer Lifetime Value: what is meant by this?
Defined as one of the fundamental metrics in the eCommerce field, Customer Lifetime Value, it allows you to know the value that a customer can generate over time, thanks to an estimate of their purchasing behavior.
Precisely by virtue of the fact that Customer Lifetime Value, starts from a kind of estimate on purchasing behavior, there are several formulas and calculation models in the literature. The simplest model involves the following formula: Customer Lifetime Value = average value of a purchase * number of times the customer purchases each year * average length of customer relationship (in years).
As can be easily guessed from the formula, contributing to the definition of Customer Lifetime Value, in this case, is primarily “historical” data related to purchasing behavior observed over time.
In this regard, the approach proposed by Rusty Warner, researcher and analyst at Forrester Research, is interesting, according to which Customer Lifetime Value should be overcome and rethought as the result of continuous interaction between brand and customer, where value is built and amplified through personalized interaction methods, possible thanks to an in-depth knowledge of the customer and a real-time update of the profile.
Real-Time Interaction Management, Beyond Customer Lifetime Value
This is how the Real-Time Interaction Management (RTIM) model was born from the approach proposed by Rusty Warner, which, as the name suggests, makes real-time customer interactions, predictive modeling and machine learning, the foundations on which to build personalized and valuable customer experiences from an omnichannel perspective.
Formally defined as “enterprise marketing technology that delivers contextually relevant experiences, value, and utility at the appropriate moment in the customer life cycle via preferred customer touchpoints”, Real-Time Interaction Management is based on key aspects such as:
- user recognition from an omnichannel and cross-site perspective (read identity resolution);
- the context, i.e. everything related to the customer, from historical data to information collected in real time;
- experience, i.e. analysis and business strategies that are essential to define the activities necessary to engage the user in the next steps;
- orchestration, i.e. the activation of the various customization activities
- in the most relevant touchpoints both online and offline;
- optimization, reports and insights to improve and optimize the various activities and improve performance.
As can be easily understood, in a context of Real-Time Interaction Management, the centralized collection and management of data play a crucial role. It is, in fact, thanks to the possibility of having an up-to-date and real-time unified customer view that advanced profiling and segmentation activities are put in place, first, and strategies aimed at creating personalized and valuable customer experiences, then.
Customer Lifetime Value and Real-Time Interaction Management: the people-based approach wins
Whether it’s calculating the value of a customer from more historical data or putting in place the best strategy to increase customer value at an exact moment, it doesn’t matter: CLV and RTIM both highlight the importance for companies to focus on the customer relationship as a critical factor for their success.
In this context, technological solutions such as Blendee’s Marketing Operating System provide the technology stack necessary for truly people-based marketing strategies.
