#11 Customer Lifetime Value, Customer Culture


Welcome to the 11th edition of my customer strategy newsletter. The five topics this week are:

  1. Changes to the NPS Forum on LinkedIn
  2. Lifetime value of a customer
  3. Latest blog posts
  4. Notable items from other sites
  5. Looking forward

The NPS Forum on LinkedIn

The largest Net Promoter System group on the web is the 22,800-member ‘NPS Forum’ on LinkedIn. I noticed that its owners had not posted anything in the last couple of years and seemed to have lost interest. I asked them to make me an administrator of the group. That has now been done, as of this morning. The group is here. I would welcome your advice on how to make it into an interesting place for people to learn about NPS and share their experience. I will probably make the first changes next week, based on whatever input I have by Monday.

Lifetime value of a customer

No matter what customer experience improvement system you use, knowing how much a customer is worth to you is important. With the exception of companies that only have a small number of large customers, doing P&L accounting by customer is rare. It is also quite hard to do accurately, as whatever method you use to allocate overheads by customer is somewhat arbitrary. Your finance leader is a critical ally in the work.

Lifetime value calculations are easiest for businesses that depend on renewal of annual contracts. You can use past renewal rates to predict the future. Renewal rates depend on how much the customer likes you, of course. There may also be money-losing contracts that you would rather not renew. I cover a variety of such concepts in my latest blog post: How to calculate the lifetime value of a customer. Link below.

Our latest blog posts Older posts are of course still available on the blog page.

How to calculate the lifetime value of a customer
Calculating the lifetime value of a customer is somewhat like calculating the value of a company you would like to acquire. While you can find many methods of doing the calculation, only one is completely correct. There are also a number of satisfactory approximations…
image How to evaluate customer survey text analysis software
Customer research of all types can be divided into two categories: rating questions and open questions. You are dealing with rating questions when you are asked to provide a number on a scale as an answer to a question. Open questions let you say whatever you want. The software challenge is then how to analyze all of those responses without human bias…
Cost reduction communication mistakes I have seen
This post covers several examples of major communication mistakes I have seen. Managers generally don’t like talking about reductions, and do quite a poor job. Leaders get things done mainly by what we say and what we write. Your audience reacts emotionally, rather than rationally to cost reduction announcements. Read these examples. If they make you squirm a little, I will have been successful.

Notable customer experience items from other sites

Posts by Adrian Swinscoe

I have been reading more and more of what Adrian writes for Forbes and on his own blog. I have written about customer culture in the past, and that is one of his focus areas. His article How Middle Managers Can Boost Employee Engagement and Customer Experience is a good read and one of his most popular. Adrian says one of his favorite articles is How The Customer Experience Vision Gap Is Holding Many Organizations Back. Once again, it is mainly about corporate culture. Apparently, Peter Drucker did not actually say “Culture eats strategy for breakfast”, but the sentiment is still a good one. If you like what Adrian Swinscoe writes, his blog is here.

The 25 Worst Customer Service Stories To Train The Best Customer Service Reps

I wish I could say I did not laugh at a lot of these, but I did. My apologies. The article from Kate Nasser is here.

Looking forward

Our books will actually be released a week from today. The Kindle versions are available now for pre-order on all Amazon sites worldwide. Clicking on each of the cover images will take you to their Amazon.com page. Our ‘Books’ page has links to other Amazon sites. Peter and I are feeling pretty good about them at this point, and working on their promotion. Print versions will follow in April.

The other thing that will be ready a week from today is the long-awaited final version of my study on the relationship between customer and employee satisfaction. You may recall that no 2016 American Customer Satisfaction Index numbers were available for 71 of the 340 companies covered. I now have all 71 missing numbers and am updating the study. At first glance, the numbers appear to be even more surprising than last time. More next Thursday, when the data crunching and triple validation is complete.

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You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

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