Role of Customer Lifetime Value analysis for Effective CRM in the Retailing Sector: An Empirical Study in the context of Online Retailing

Abstract

One of the most important elements of an effective customer relationship management (CRM) strategy in India's retail sector is customer lifetime value (CLV) analysis. By understanding the potential value that every customer can bring to the business over the duration of their relationship, retailers can more successfully modify their marketing, sales, and service initiatives. In India's retail sector, where client expectations are always shifting and competition is fierce, CLV analysis provides insights into the most profitable and devoted consumers. Shops can allocate resources wisely by focusing on high CLV customers, building relationships, and offering individualized experiences to maximize retention and lifetime value. With the use of CLV research, retailers may also precisely forecast future revenue streams, identify trends, and anticipate customer behavior. Due to the ability to make proactive decisions regarding product development, pricing schemes, and marketing efforts, this ultimately increases customer happiness and loyalty. Data was collected from 244 retailers. Through exploratory factor analysis, four factors were determined w.r.t. the role of Customer Lifetime Value analysis for Effective CRM in the Retailing Sector are Resource Allocation, Retention Strategies, Product Development, and Long-Term Relationship Building. The study concludes that there is significant impact of “Customer Lifetime Value in CRM”.