Customer lifetime value vs. the value of the customer’s life time

Carmen Beissner
3 min readJan 12, 2020

Many of our everyday tasks have been digitized to our convenience and can seemingly be accomplished with the blink of an eye and few clicks. But do tech companies actually have our best interests at heart? Are they always serving us to save time?

Minimalism. Artist: Paetrick Schmidt

Our need for convenience already began with the industrialisation and snowballed in the past decades, hand in hand with a more complex lifestyle most of us live. Frozen meals were invented because women entered the workforce and there was no one at home to cook dinner. Today we order those ready-meals online and then delivered straight to our house at our most convenient time slot. On the surface, it seems as if technology and the companies behind them are serving us, saving us time to accomplish and experience even more.

Inspired by the TEDTalk by Center for Humane Technology, the subject of wasting time and „time is money – About customers as part time employees“ on ARTE https://youtu.be/JsCGUrSbU98

You have heard of the expression “customer lifetime value”. This is a term coined to define what profit each customer generates throughout their relationship with a company. Companies determine if you have value to them or not. Marketers are working very hard to keep your attention and to make you feel special. Whether it is by generating your name in the subject line of a birthday email or reminding you that you ordered your last batch of contact lenses six months ago and you may be needing to refill. Even if it was just that second to move that newsletter from your inbox to bin, stole time from the customers’ lives and downgrades the human attention span. If we’d try to calculate the time we spent to avoid attention from a company, unnecessary information and touchpoints for the information, we are losing a lot of money.

285 years of customer conversations

I have accumulated about 30 Million customer contacts in the companies I worked for. If each of them had an average of five minutes, then that’s a total of 150 Million minutes. That is 2.5 Million hours or 285 years of customer conversations.

So, if time is money and to get a clearer sense of how valuable time really is, it might be a good idea to

set an hourly rate as a customer, say 60€ per hour

So, if you would multiply the 60€/hr with 2.5 Million invested hours, customers paid 150 Million € of their lifetime — and this was only in my professional career. Did they always receive an equivalent value in return? Not always.

The companies themselves should also consider their own investment. They have set up large customer contact centres, hired customer service staff and probably paid around 5€ per contact, in total 150 Million €.

There are smart companies who do actually use customer contact to build great products and services. Really listening to customers and evolving processes which customers complain about. If one customer had a certain issue, chances are that more did. Hardly any issues or questions are unique and by eliminating these as soon as possible less customers will waste their time and money.

By valuing customers’ actual lifetime, companies will thus see their customer lifetime net value increase.

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