In the organization I work at, an academic library, we do
not have knowledge of value of our customers. While we collect different
statistics related to resources and services we provide, we rarely look into
the statistics in term of cost, we didn’t perform customer break-even analysis
either. In the past year, we started to look at cost per use for electronic
resources and journals. However, most of the decision for whether to continue a
resources or services is based on overall usage. If there is very low usage, we
cancel the resources or services. As for whether utilizing CLV could be
beneficial to my organization, I’m not too sure as some of the actions need to
be taken to implement CLV may not be flexible for us. For example, the mission
of our organization is to serve everyone on our campus, it will be difficult for
us to identify a segment of users who rarely use our resources and services and
firing them. Besides, since we don’t charge for our services explicitly,
rewarding customers with discount vouchers or preferential services may not be
possible.
Practical issues of implementing CLV includes gathering of
data related to customer activities. As mentioned by Ofek, response rate may
not be available directly. Also, the firm may not have knowledge of the exact
size of each segment they serve. Besides, setting a reasonable expectation at
the prospects stage can be challenging. If the firm creates expectations that
are exceedingly high, customers may be easily acquired but will not be
satisfied or retained. This results in a negative impact on both per-period
revenues and survival rates.
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