industrial marketing CLV

Producing sales through Industrial Marketing CLV

In this blog, I will discuss industrial marketing CLV. First, let’s explain CLV. Customer Lifetime Value (CLV) is the way you calculate the value of each customer over the lifetime of your relationship. Consequently, it can help you anticipate future sales from your customers to predict business growth. After all, the value of a customer isn’t just one purchase. It’s the total amount they will spend over the years if you continue to do business with them. Industrial Marketing CLV is essential because by retaining a customer, the higher your return on the investment. In other words, your profits grow and the cost to get that customer shrinks. It is important to remember that it costs more to get new customers than to keep the current ones happy.

Calculating Industrial Marketing CLV

When determining an individual customer’s CLV, you will need to go through several steps. First, calculate their average sale value (in other words, the amount of their regular or average purchase). Next, multiply that number by the average buying cycle (this is how often a customer purchases your service or product within a set time – you know that repeat business we all love). This step will give you the customer value. Then, you need to determine your average customer lifespan (how long you keep a customer on average). You can determine this number by reviewing customer history and averaging several customers’ lifespans. Finally, multiply the average lifespan by the customer value to determine that customer’s lifetime value. This computation will produce your industrial marketing CLV.

For example, let’s plug in some numbers to go through the steps to calculate CLV. If a customer’s average purchase is $1000 and the buying cycle is three times per year. The customer value is $3000 per year. With a lifespan of 15 years, the CLV equals $45,000 for that individual customer. Once you have done this exercise several times, you will be able to calculate an average CLV for your company. By knowing your industrial marketing CLV, it will help you better establish marketing budgets and sales goals. In addition, it will help you develop ROI versus the cost to acquire a customer.

Categories Industrial Marketing CLV

Now in a perfect world, every customer would have the same CLV. Of course, this isn’t an ideal world. With industrial marketing CLV every customer is different with specific ordering criteria and buying cycles. Because of this factor, you should create categories for your CLVs. I recommend, using Past Customers (ones that have long or sporadic buying cycles), Engaged Customers, (ones that order frequently), and Active Customers (ones that place ongoing orders). By using this method, you will have more accurate CLVs for planning purposes. Additionally, it might show opportunities you have been ignoring with Past and Engaged Customers.

Maximizing Industrial Marketing CLV

The first thing to remember in taking advantage of industrial marketing CLV is the word “KEEP.” After all, you have to KEEP the customer for there to be a lifetime value. Once you have gained them as a customer and made the first sale, you must keep them happy. You build long term relationships by delivering on your contract or by making sure you make anything that might be wrong, right.

Understanding industrial marketing CLV will help you to plan more accurately regarding sales goals, capital gain purchases, and marketing budgets.

However, it is more than fulfilling an order as promised when considering industrial marketing CLV. Because of this fact, you need a process that helps you KEEP in regular contact with all your customers. Previously, I mentioned lost opportunities. When you establish a customer contact program, you KEEP the relationship going, as well as the chance to pick up more sales. Our agency does this through several methods, such as e-bulletins, direct mail, phone calls, and social media. By maintaining this customer contact, you will KEEP the revenue coming in.

About the Author

Paul Kowalski (or Pappy as he is called around the office) spent over two decades working at other agencies before opening Conach Marketing Group in 2008. The early part of his career was working with Fortune 500 clients at different agencies. However, working with smaller clients was his preference. This choice was because of the impact on a client’s business growth and forming closer, personal relationships.

About Conach

When he was creating Conach, his goal was to bring those Fortune 500 strategies along with years of B2B marketing experience to small business marketing clients. As a result of focusing on business to business marketing, Conach specializes in construction marketing, financial marketing, and industrial marketing. Even though we are in Mid-Michigan, Conach provides marketing services to clients across the country.

For more information visit or contact us or call 989.401.3202.

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