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Posted: March 27th, 2020

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The Starbuck manager emphasizes on customer lifetime value because it is the accrued benefit from loyal customers. All brands strive to create a sense of loyalty among their clientele. A loyal customer maintains visits to the brand even when the business has a difficulty retaining the clientele. Additionally, loyalty brings in more customers through referrals. Retained customers also check the quality of the brand. Feedback from such customers is highly respected because they know the value of service that they deserve. For this reason, the marginal customer lifetime value from each customer goes a long way in ensuring the profitability of the brand. In particular, in the service industry customer retention is critical.

The Starbucks manager cannot overstate the importance of customer retention value. The factor is explained as the monetary value arising from customer relationships. The benefit is used to predict the performance of the business. Customer retention shifts the focus of the entity from just profitability to service excellence. Clientele lifetime value also mitigates the amount spent on attracting new customers. The value is part of business intelligence, and it is useful in the development of effective strategies in business growth. The calculations are also used as a benchmark against goals set for growth. All businesses set targets for service delivery, profitability and many more. Members of staff also use the targets to ascertain their input and value addition to the company. The retention value helps to build accurate customer personas. Consequently, funds allocated to marketing and advertising are spent more prudently with figures from customer retention value. The business focuses on a customer segment that can deliver the highest profitability to the company.