how does CRM affect CLV

How CRM affects CLV

how does CRM affect CLV

A CRM impacts one of the most insightful sales and marketing metrics: the Customer Lifetime Value (CLV).

What is a CLV?

Anyone can agree that the benefit of long-term business relationships is their value over time. That’s why Customer Lifetime Value (CLV) metrics exist. The Marketing Accountability Standards Board (MASB) defines it as the “value of the future cash flows attributed to the customer during the entire relationship with the company.”

But what does it really mean and how exactly does CLV impact business? To get a clearer understanding, let’s discuss the 80/20 rule. 

The 80/20 Rule

According to the 80/20 Rule, 80 percent sales come from 20 percent of profitable customers, while 80 percent of costs come from the top 20 percent of unprofitable customers.


Now, the problem is, do you know who your most profitable and unprofitable customers are?


If you don’t, this is exactly where a CRM comes into play. With the right CRM, you’ll know who brings the most revenue to your pipelines and which deals are the most fruitless. This way, you can better plan your sales strategies and expenses, including nurturing, letting go, and up-/cross-selling the right customers.

The Correlation Between CRM and CLV

Through CLV there are five questions a company aims to answer:

  • Who are my best customers?
  • How can I better serve customers and what that value adds up to?
  • What is the value of increasing customer retention?
  • How can I increase customer share?
  • How can I improve net profit?

A CRM helps to answer the key questions above. That’s because all the data needed are recorded in the CRM and ready to be repurposed.

Furthermore, although CLV can be difficult to calculate and measure, it is recognized as an important and strategic way to think about customers. With a CRM in place, companies are further encouraged to shift attention from quarterly profits to the long-term status and health of their customer relationships. Determining CLV is a great way successfully project gross margins, profit margins, and customer acquisition costs.


Another big asset when combining the power of a CRM and the concept of CLV is how a CRM tool streamlines the sales process. Sales and marketing tasks are automated which increases efficiency when dealing with clients. This includes logging data, saving emails, and producing reports. Efficiency is key to freeing up time and focusing on quality customer interactions that lead to stronger relationships.

CRM and CLV: Focus on the Highest Potential Customers

To stay competitive, sales and marketing teams must focus on the right customers. CRM can help measure CLV by uncovering traits behind the deals you lose and win. It’s one thing to measure customer profit, but game-changing companies take on CLV a step further. 


Get an accurate data that can help you measure your CLV from a reliable and robust CRM like Pipeline CRM. From data customization to sorting to reporting—all are accessible and ready to be repurposed to support you in making revenue-making decisions. 


See Pipeline CRM’s complete features and integration options

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