Customer Lifetime Value of Starbucks

 Customer Lifetime Value (CLV) represents the importance of the customer to a business over a span of time. With this formula, you can measure a basic Consumer Lifetime Value model for your company:


AVERAGE ANNUAL CUSTOMER PROFIT ✕ AVERAGE DURATION OF CUSTOMER RETENTION


The higher the value, the higher the marketing expenditure each client will have. This is a crucial principle to be grasped in the industry and for individuals looking to spend capital in consumer-oriented businesses. CLV tells how much you need to invest in consumer acquisition

Your consumer acquisition expenses may well be higher than the first transaction, but are you making money off the customer in the long run? Identifying the customer's lifetime value to your business will give you the answer.



Let us take Starbucks as an example. Let us first see how Starbucks creates value to its customers-

  • Payment made easy through their Mobile Apps

  • My Starbucks Reward- to avail various benefits, discounts, birthday drinks, etc.

  • Special events/offers only for their members

  • App implementation with other platforms, such as Spotify, to explore music played in stores.

  • Members would be first to notify the future launch of seasonal and new items.


Starbucks aims to show itself to be genuinely customer-centric, implementing creativity around the core principle of their engagement with consumers. Their ability to adapt and innovate in their new technologies has helped them develop and capture tremendous value for both consumers and the company. As Starbucks has access to more consumer data, the capacity to establish positive, intimate relationships with consumers can only improve.







Comments

  1. CXcherryApril 21, 2022 at 5:05 AM

    Extremely useful information which you have shared here about Customer Training Program This is a great way to enhance knowledge for us, and also beneficial for us. Thank you for sharing an article like this.

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