Only 33% Of Russian Companies Use The LTV Metric

According to research conducted by the Digital Economy Development Fund, the analytical company Coffee Analytics and the Mindbox and Owox platforms, only 33% of companies in Russia use the metric LTV (Customer Lifetime Value) for measuring success.

For comparison, in the United Kingdom, it’s anticipated that 93% of retail and e-commerce businesses use the metric.

As part of the study, market representatives were asked about the relevance, calculation and application of the LTV (Customer Lifetime Value) metric. This is the predictive value of an individual customer in the money that he will bring to the company by buying its goods or services during his “life” – that is, the period of cooperation with the company. Usually, a period of 12 months is used in the assessment.

Studying the methods and frequency of calculating LTV, experts found that 42% of companies update the metric once a month, 27% – once a week and 17% – daily.

94% of respondents use transaction data when calculating. In second place in frequency (46%) are advertising campaigns and sources. At the same time, in the b2b segment, “behavioral data” is more often used:

  • Behavior on the site (41%)
  • Calls and chats (31%)
  • Consumed content (24%)
  • The reason is that with greater value in selling b2b, companies seek to improve the understanding of the customer’s prospects in the first place.
  • But for b2c companies, “advertising data” is more relevant: reactions to promos (26%) or the use of loyalty points (43%), since with them, taking into account large audience coverage, they seek to scale marketing.

In conjunction with LTV in Russia and the CIS, other metrics are also used:

  • Average check (it is considered by 79% of companies)
  • Churn Rate (churn rate, 73%)
  • CAC (cost of attracting a customer, 71%)
  • More than 50% also consider retention, CPO and conversion of the main stages of the funnel
  • The study shows that 98% of companies that have implemented the metric consider it important (of which 23% are critical and 58% are extremely important).

The complete study can be found Цифровая стратегия (decdfund.ru).

 

Dan Taylor
Dan Taylor is an experienced SEO consultant and has worked with brands and companies on optimizing for Russia (and Yandex) for a number of years. Winner of the inaugural 2018 TechSEO Boost competition, webmaster at HreflangChecker.com and Sloth.Cloud, and founder of RussianSearchNews.com.