If You Can’t Measure It, You Can’t Manage It

Metrics are an essential business tool that enable each customer advocacy program to evaluate its performance and impact over time. We at Referential track various key business parameters for each of our clients on a monthly and bi-annual basis. One of the most meaningful metrics that we have in our portfolio is Client Lifetime Total Revenue (CLTR).

Client Lifetime Total Revenue was developed to evaluate the dollar value of a client relationship, over the length of the relationship. In other words, how much money the customer has spent and how long they have been a customer. This metric is important for multiple reasons: A big one for us is that it enables us to quantifiably contrast the value to our clients of advocates against non-advocates; and from this we can demonstrate the tangible business impact that active advocates are making on revenue.

CLTR typically reveals that individuals who participate in customer advocacy programs have a higher spend with our clients and hold the relationship for longer periods of time. Secondly, as many studies have shown, the cost of acquiring a new customer is significantly greater than the cost of retaining one. Therefore, with a focus on increasing retention rates, CLTR analyses quantify the contribution advocacy is making in helping to shift the proverbial needle.

Tracking CLTR over time allows Referential to demonstrate the importance of customer reference programs to upper management. Over time, an effective program has an upward trend in CLTR for customer references as compared to non-reference customers. This data plays a big role during budget cycles (as well as annual reviews!). The metrics prove that the investment in the program yields a significant return (usually multiple times over) through the increased retention of customers that are proven to spend more money and encourage prospects to purchase too. It doesn’t get any better than that!

We benchmark CLTR performances for all our clients – this enables us to conduct blind comparisons across industries. If we have a client that is trailing the Referential benchmark for their industry, we are able to use the diagnostic data from CLTR to analyze and optimize their advocacy program performance.

For more information on CLTR and how Referential can help with your metrics, contact us!