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From merely increasing footfalls, and then focusing on top-line growth, the focus of firms has now changed to customer lifetime value. Customer lifetime value (CLV) is the value the customer generates over the whole period of association with the firm. It considers all the future cash flows of that customer arising from him consuming in the future. CRM should lead to increased CLV. When one thinks of maximizing CLV, one has to take a long term perspective and hence focus on customer retention rather than just making a sale. This, coupled with the concept of the Pareto principle ? that 80% of a company's sales come from 20% of their customers ? has made firms have realized that retaining that 20% is integral to their increased profitability...
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