Blog post

CX and LTV are Like PB and J

By Kirsten Newbold-Knipp | September 21, 2015 | 1 Comment


Customer experience is on the mind of every marketer.

Last week at Dreamforce in San Francisco, I talked with countless marketers who are all working on creating seamless journeys that connect experiences across channels and provide optimized interactions throughout the entire journey – a journey that doesn’t end at purchase. These journeys continue through product or service usage, customer support and repurchase – parts of the journey that are not historically influenced by marketing. Marketers are stepping outside their comfort zones and need to move beyond traditional acquisition metrics to consider the full lifecycle.

Lifetime Value (LTV), also referred to as CLTV or customer lifetime value, is a metric that helps businesses track how valuable customers are at an individual, segment and entire client base level. Subscription businesses like telephone service, SaaS and even gyms have long looked at the value of a customer over their lifetime to identify patterns of churn risk and try to seek more populations of high value clients. Unfortunately, outside subscription business models only a small number of the marketers I talk to are actively monitoring LTV.  (Learn how commerce organizations can tie LTV to operational metrics. Subscription required.)

Why should marketers track LTV?

Just like peanut butter is better with jelly (or chocolate:)), customer experience is best when paired with metrics and KPIs that guide you on your transformation.

customer experience & lifetime value are like PB&J
Use LTV to measure success of customer experience marketing activities


LTV is one of few financial metrics that reflect the results of overall customer experience across an entire customer journey (many companies use NPS for loyalty, but it doesn’t take into account revenue implications). Now that marketers are actively influencing more aspects of ongoing customer engagement, it’s important to define benchmarks for the metrics that extend beyond acquisition. While many companies don’t yet track LTV, they can begin by looking at historical data to create benchmarks for specific clients, personas or segments. This will enable them to model or estimate the suggested LTV for new clients who meet similar profiles.

Once these benchmarks are established, marketers can begin to collaborate across teams to make changes to positively influence LTV over time. As the customer experience improves, LTV should also improve. Alternatively, if changes are made that negatively impact LTV, then can be quickly rolled back and re-evaluated.

No matter what type of journey mapping and orchestration tools you are thinking about – don’t start making sweeping changes to customer experience before you define the KPIs that will enable you to evaluate your progress. Consider LTV as one of a few metrics to support your transformation (Gartner for Marketing Leaders subscribers, read about a few other relevant CX metrics).

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

Leave a Comment

1 Comment

  • Excellent piece. The journey must be mapped and while there are tools to bring together elements of the process, humans must define the expected journey with customer input. Organizations must also expect that tools will be replaced as the process evolves so adapting to those changes takes planning and a focus on the metrics each tool and process can bring. Keep it coming.