What is the customer lifetime value of each of your store’s customers? Customer lifetime value is used to arrive at an economic appreciation of the relationship with each customer. This measurement is used to determine the total contribution to sales by each customer over a period of time ranging from their first purchase through their last purchase. Customer lifetime value can help retail jewelry store owners and managers recognize the longterm value of customers. Customer lifetime value focuses on future exchange transactions but also considers the cost of acquisition of each customer and the costs associated with maintaining ongoing relationships with customers.
Retail jewelry stores can better appreciate their return on investment of advertising, event marketing, yellow page advertising, etc. by tracking the source of each new customer. Sometimes jewelers do not invest in more effective media because of the required investment. If specific media performance can be tracked to the acquisition of new customers who purchase more expensive jewelry more often the return on investment should reinforce and confirm the selection of the media. The most expensive advertisements are the ones that are not productive. Think past the initial investment in the advertising, media, or programs and consider the total return on investment.
Understanding the worth of each customer is becoming more important as retail jewelry marketing efforts are evolving to include more sophisticated media approaches. No longer should a retail jeweler accept the same marketing approaches used over past decades. Consumers, markets, and media have all changed. Understanding customer lifetime value will help jewelry marketers appeal to the most desirable and most obtainable new customers who offer the greatest potential longterm relationships.Follow JCK on Instagram: @jckmagazine
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