Everyone has heard of a credit score by now, but there’s a new kind of score out there that impacts your finances in some less obvious ways — and chances are you don’t even realize it.
It’s called your customer lifetime value score, or CLV.
Did you know you have a customer lifetime value score?
Ever sat on the phone with some big company to resolve a customer issue? We all have. Unfortunately, it turns out the order in which your call is received may have little to do with the order in which it will be answered!
Unfortunately, getting a quick response time increasingly may have more and more to do with your CLV score with that particular business.
The Wall Street Journal reports many businesses work behind the scenes with any of hundreds of third-party marketers who help them develop CLV scores on all their customers using any of a wide range of data points.
Simply stated, your CLV score is a numeric representation of how valuable you are as a customer to a given company.
If you are a reliable and repeat purchaser of goods and services — without needing to be enticed to buy with a discount coupon — then you’ve probably got a great CLV score with businesses.
On the other hand, if you shop infrequently, make too many returns and are constantly calling up or emailing customer service with a complaint, your CLV score probably stinks!
So why does this matter?
According to the Journal, your CLV score can not only determine how long you wait on hold to resolve customer issues, it can also play a key role in defining the perks you’re offered and even the prices you pay for select services!
If you have a bank account, a cellphone or have shopping online, chances are there’s at least one CLV score floating around out there on you — and possibly several.
Unfortunately, unlike with traditional credit scores, CLV scores are not available to consumers and there’s no oversight of this hidden data industry.
What kind of data makes up your CLV score?
For proprietary and competitive reasons, no one wanted to go on record detailing exactly what comprises a CLV. However, marketing technology provider Optimove told the Journal that the following factors would likely figure into developing a CLV score for a clothing retailer:
- Your age
- Marital status
- Home ZIP code
- Shopping patterns (when are you most likely to shop? weekdays or weekends?)
- Shopping behaviors (do you only buy on markdown or do you pay full price?)
- Likelihood to make returns
Here’s a look at how the Journal says CLV scores play into a handful of industries…
Verizon and Sprint both acknowledged CLV plays into what kind of marketing offers you see, including offers of free phones and other perks.
Among the data points that the wireless carriers care about are “the number of times a customer has dialed a call center and whether that person has browsed a competitor’s website or searched certain keywords in the past few days,” according to the Journal.
Your CLV can determine how quickly a retailer responds to you over email, say, when you have a question about returns or other consumer issues.
Speaking of returns, make too many of them and you’re likely to get a negative CLV!
Loaner cars, better service scheduling and access to special events are some of the hallmarks of having a good CLV score in the dealership world.
Among the factors dealers look at include prior car purchase history, the number of teen drivers in a house, ZIP code and even what kinds of credit cards you carry in your wallet.
This goes way beyond frequent-flier status in the airline industry!
A good CLV score could mean you get resolution when there’s a service disruption, seat upgrades or just plain better service when you fly the friendly skies.
Credit card industry
Your CLV helps determine, in part, what perks you’re offered to retain your business when you call up to cancel a credit card.