3 Predictions That Explain Why Customer Lifetime Value Management Is Important
By : Dr. Prateek Kapadia
Chief Technology Officer
The new normal has increased our dependence on technology across all spheres of life, especially for subscription and usage-based businesses. Thus, as we step into a new year, let us look at three interesting predictions from Gartner on what technology will do in these industries in the next 2 to 3 years and even beyond.
By 2024, 10 % of digital commerce orders will be predicted and initiated by AI
Digital commerce has been proliferating. The pandemic has pushed it even further, with almost half of the customers buying products they’ve never purchased online in the past. However, it is interesting to note how AI influences these purchases; AI is expected to impact 10% of digital commerce orders globally, which translates to 20 billion online purchases a year.
By 2025, 75 % of companies will “break up” with poor-fit customers
Businesses have always strived to retain their customers. But the surprising prediction is that this will reverse by 2025. 3 out of 4 companies will realize that they cannot serve all their customers. Their products and services, prices, or contract conditions, may not suit some customers, and hence they will focus on ‘breaking up’ with those poor-fit customers. At the same time, businesses will acquire better-suited customers whom they can serve long-term.
By 2025, 60 % of large organizations will use one or more privacy-enhancing computation techniques
Customers are becoming more sensitive to their data privacy in the online world. Let us think about how many times we are asked to confirm our privacy settings on our phones or browsers. It is a significant cultural shift in the history of the internet. This trend will intensify further and push 60 % of large companies to adopt new technologies called privacy enhancing computation in various areas of their businesses.
So, what do these trends convey?
The above trends are among the many that the world will witness shortly. But, there is a common thread that connects these trends: Customer Lifetime Value Management (CLTVM). AI algorithms need to factor in the lifetime value of customers derived based on purchase and, more importantly, usage patterns to recommend the right offers or products. Companies that make “retention” or “break up” decisions need to base them again on predicted lifetime value. And businesses need to invest in customer privacy as this is a core enabler of creating a more robust, transparent relationship with customers resulting in long-term relationships and higher lifetime value.
Where does Flytxt come into play?
The focus of Flytxt has always been Customer Lifetime Value Management. Flytxt has a uniquely differentiated, award-winning CLTV technology – CLTV data model, privacy-preserving analytics, CLTV analytics, and CLTV AI.
We are now embedding our technology to market-leading CX and BSS platforms to shape digital CX. It enables us to implement new use cases in marketing optimization, customer retention, product/offer design, assisted care applications, and digital sales. Our goal is to impact many CLTV decisions and actions via our technology across subscription and usage enterprises.