What is Customer Experiences’ Role in Branding and What is the Lifetime Value of a Customer?

What would a brand be without its customers?

Today, 89% of companies compete based on customer experience. Social media platforms allow consumers to, literally, say whatever they want, and a brand’s reputation is largely based on opinion.

Everything that a brand does affects the customer’s experience in some way. Due to the current competitive business climate, investing in customers is one of the best things a brand can do.

What do customers want?

They want to be taken care of. They want to know that the brand that they’re investing in will benefit them in some way. They want to connect with the brand.

It’s important to establish a solid brand and audience before connecting with them. Consumers want consistency, and a well-established brand allows for recurring business. Once consistency is delivered, consumers become loyal to that brand.

The perfect customer experience comes when a brand can determine how to deliver exactly what its audience wants. A brand needs differentiation. It needs to set itself apart from the competition.

According to, “A 2012 study shows that 93 percent of companies say customer experience is among their company’s strategic priorities, and 75 percent of respondents want to use customer experience to differentiate”. In 2012, only 36% of companies competed based on customer experience. This number has risen due to the emergence of social media.

Once a consumer becomes loyal to a brand, it’s important for a company to maintain that relationship. Lifetime customers are incredibly valuable.

What is the Customer Lifetime Value?

The Customer Lifetime Value (CLV) is the key to understanding your customer. It helps you make important decisions like sales business decisions, marketing, product development and customer support.

This is important because as a company, you want to identify the customers that bring significant business in and make sure they are taken care of and satisfied with the company.

According to, “knowing the CLV helps businesses develop strategies to acquire new customers and retain existing ones while maintaining profit margins.”

How do you calculate CLV?

The CLV can be measured in many ways. It can be used to identify the touchpoints where a customer adds value, track a customer’s journey, measure the revenue earned at each touchpoint and add it all together over the lifetime of a customer.

The simplest way to start calculating your customer’s CLV is to take the revenue you earned off the customer and subtract the amount of money you spent on them. This will give you the customer’s value to the company.

Customer revenue-customer costs and serving the customer=CLV

How can you predict your CLV?

By creating a graph that shows the customer’s sum of all purchases over an extended period of time, you can see who is bringing in the most revenue. Based off of the customer’s purchase history, the company will know which customers to spend more marketing dollars on to maximize the potential budget.

According to, “predictive CLV is the most powerful way to not only understand what a customer is worth to you now, but also see how their value will change over time.”

As the lifetime of the customer grows, more accurate data is collected. The customers that have a high CLV are given differentiated services and offers as a reward for their business.

Why is knowing the CLV important?

The CLV is a great metric to optimize your business, but also keep an eye on your customer’s cost. If the cost of serving your customer becomes too high, you are likely losing money on them even though they have a good CLV.

The CLV is not about complex calculations, rather, it is a method to be mindful of the value a customer provides your business over the course of a lifetime.