Owning a wine shop in Paris:

CLV+

CRV

The Customer Lifetime Value:

CLV

The Customer Referral Value:

CRV

CUSTOMER 1Radu:

Champion

+ Purchases+ WOM

CUSTOMER 2Sara:

Affluent

+ Purchases- WOM

- Purchases+ WOM

CUSTOMER 3Diana:

Advocate

CUSTOMER 4Marig:Miser

- Purchases- WOM

Advocates

Good CRL

Needs to be maintained

Bad CLV

Needs to be improved

Up-selling, cross-selling, reinforcing buying

Offering discounts for related product, Contracts

Affluents

Good CLVNeeds to be maintained

Bad CRV

Needs to be improved

Encouraging them to make more references

Offering discounts if they bring some friends

Misers

Bad RCL

Needs to be improved

Encouraging them to make more references

Offering discounts if they bring some friends

Bad CLV

Needs to be improved

Up-selling, cross-selling, reinforcing buying

Offering discounts for related product, Contracts

Let’s be critical

Attracting new customer – 50$/customerDiscount for a contract – 200$/yearDiscount for a friend – 10$/friendAverage price of a bottle – 15$

Type of a customer CLV/year CRV/year In total

Champion 50 bottles*15$-50$=700$

10cust-2cust*12bottles=96b*15$+8*50=1840

2540$

Affluent 50 bottles*15$-50$=700$

1cust*15$+50$=75$

775$

Advocate 12 bottles*15$-50$=130$

12cust-2cust*12bottles*15$=1800+10*50$=2300

2430$

Misers 12 bottles*15$-50$=130$

1cust*15$+50$=195$

325$

Overall benefits 6070$

Type of a customer Before Calculations After

Champion 2540$ +0 2540$

Affluent 700$ 8cust*180$-8*10$+8*50$=1040$

1815$

Advocate 2300$ 50*15$-200$=500$

2800$

Misers 195$ *Affluent 50*15$-200=500$ 695$

130$ *Advocate 10cust*12b*15$=1800-10cust*10$=700$+10*50=1200$

1330$

Overall benefits 6070$ 7850$/8485$

Let’s be critical again

Attracting new customer – 50$/customerDiscount for a contract – 200$/yearDiscount for a friend – 10$/friendAverage price of a bottle – 15$

• Relationship• After sales

5 TIPS FOR SUCCESSFUL CRV

Tip #1: Timing

WINBonuses, incentives

WINNew clients

Tip # 2Twice the

benefit

Tip # 3Treasures

Asking for a referralA long processGet information from new clients

Tip # 4Tracking

Tip # 5Thanks

Conclusions

68% 33%

ConclusionsCOMPETITION

ATTACHMENT

HARD TO TRACK

REFER AGAIN?