When it comes to dealing with customers in case of a Service Industry, the business needs to think far beyond than just providing the best service during and after the transaction is completed.
Travel Industry being one of the highly categorical industry out there requires some extra effort if you want to grow exponentially.
The ideal way is to be acquainted with some technical yet easy to understand concepts.
Customer Lifetime Value is one such concept that, travel agents can learn and use the understanding to effectively grow their profits.
In the simplest terms, Customers Lifetime Value (CLV) is a measurement of how valuable a customer is to your company with an unlimited time span from just the first purchase.
Please note that we won’t get too technical to understand this but just the basic idea behind the concept.
When any travel business takes in to account the CLV of any customers that walks through the door of your office or enters your website, the perspective is broadened for the travel agent to better deal with the customer with utmost efficacy and care.
One needs to understand the importance of your first impression, not just the first dealing, but the first booking experience of the customer.
The entire flow actually tells the traveler a lot about your organization and you should not take it lightly!
How do you Calculate CLV?
If a traveler has booked one packages per year costing Rs. 15,000 for last 4 Years then the CLV of this traveler is Rs. 60,000. That’s the simplest calculation that you can do.
Now obviously as the business grows, the details become more specific but the crux remains the same.
Now, let say due to any reason the traveler stops purchasing from your agency, which may incur a large impact on your organization’s cash flow.
This is the major reason that every travel agent needs to understand the importance of CLV when it comes to the Travel Industry.
So next time you are dealing with your customers related to a booking, do calculate their CLV and enlighten yourself with what value each and every customer holds for your business over a period of time!
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