Research Desk – BrandSensitize^™

Attending events, sponsoring sports shows, and pursuing large budgets and photo opportunities in magazines will not be the main factors that set the most successful marketing organizations apart in the coming decade. Instead, the next decade will be defined by the courage of marketing organizations to integrate their strategies with sales and new business development leaders, which will differentiate them from the competition.

New marketing organizations are implementing bold operational changes that result in quicker outcomes, better customer retention, a unified approach, growth, and measurable business impact.

In the new era, regional marketing and branding teams ensure that sales leaders make informed revenue projections by tracking and measuring the most crucial element of Customer Lifetime Value (CLV). This mathematical approach can improve revenue estimates and future projections through collaboration between sales and marketing teams to achieve effective management outcomes. Sales leaders can effectively monitor account longevity and take proactive steps to address sudden erosion or decline. It assists sales leaders in prioritizing high-value segments, optimizing marketing spend, and designing effective customer strategies. Modern marketing organizations are helping internal teams serve as trailblazers in identifying new opportunities and charting the path forward. By mastering business metrics, the marketing function becomes more than a support unit for events and photo opportunities. It becomes a true brand curator, leader, and strategist!

An integrated approach to customer retention and brand loyalty

Minimizing the effort to reach target audiences, providing a comprehensive view of the customer including the post-sales experience, and understanding buying propensity are some of the key parameters that any organization cannot afford to overlook. Personalized interactions and proactive post-sales support should be central throughout the entire customer journey. By leveraging predictive analysis, data-driven business decisions, and important parameters like Average Order Value (AOV), new purchase frequency, customer lifespan, quality of revenue (QoR), business loss, gross margins, retention rate, post-sales support factors, customer feedback, and churn rate, organizations can enforce technology and track these metrics through marketing teams to strengthen their SEO strategy and sales.

It’s about designing systems that identify individual clients, understand their experiences, proactively anticipate challenges, and provide them with a sense of security and personalized service.

As we know, CLV is a crucial metric in brand building because it helps businesses shift focus from short-term marketing efforts to long-term relationships. Strong and enduring CMO teams systematically measure CLV parameters to understand customers’ overall retention value, which guides product and service development teams in revenue forecasting and assessing the longevity of the revenue stream. The modern marketing function emphasizes the implementation of integrated channels, ensuring seamless data flow, and leveraging advanced tools to drive speed.

CLV insights also help in shaping services and product development based on customer segmentation.

In the B2B and B2C segments, reflecting the core principles of marketing and customer focus for India’s businesses, Microsoft organized six broader business units, representing a full product cycle to serve customers—covering consumers and enterprises, from small to large corporations, and governments. Essentially, these units are independent yet interconnected, supporting scale and growth while also strengthening each other’s journey. Microsoft’s evolution from education to enterprise—whether it’s Windows, MS Office, or a basic developer to co-pilot—all centers on customer retention and loyalty.

Google is another successful example of an organization that maximizes CLV across its advertising, product ecosystem, and enterprise services—serving both B2B and B2C segments. Google builds CLV from users by deeply integrating them into its free services, such as Gmail, YouTube, Google Maps, Google Docs, Google Photos, Chrome, and Android. These services increase daily utility, making it difficult for users to switch. The more users stay, the more Google learns about them, which in turn enhances ad personalization and effectiveness. User CLV is not measured solely by direct revenue but by long-term attention and data value. For enterprises, subscription revenue strategically aligns with workspace management and cloud integration. At Cloud Next, Google announced major AI-driven innovations and shared success stories from over 500 companies. Google Cloud delivers top-tier performance, cost efficiency, and reliability for AI training and inference, supporting both global brands and AI pioneers. According to Google’s Q1 earnings call, Sundar Pichai, CEO of Google and Alphabet, stated that its Vertex AI platform hosts over 200 models, including Gemini 2.5, Imagen 3, and open-source options like Llama 4. They are leading in the emerging AI agent space, with tools like the Agent Development Kit and Agent Designer enabling enterprise automation. Solutions like Google Agent space empower employees at companies such as KPMG to interact with and act through AI agents across applications. Google Workspace continues to expand AI assistance, while advances in cybersecurity, including the planned acquisition of Wiz, aim to deliver faster, smarter, end-to-end protection across multi-cloud environments.

Apple exemplifies building an interconnected ecosystem of various products and services. Each Apple offering boosts customer retention, increasing CLV through repeat purchases and subscriptions. About 21% of Apple’s revenue comes from services like iTunes, the App Store, Apple Music, iCloud, AppleCare, Apple Pay, and licensing (Revenue from licensing Apple’s technologies and IP). The services segment has now become a $100 billion-a-year business for Apple. Microsoft is another major player in the interconnected tech space, providing numerous services to keep customers engaged. Mergers and acquisitions are a quick and effective way to build a strong ecosystem by gaining new capabilities rather than spending time on in-house development. Companies like Apple and Microsoft strategically invest in design, customer experience, and technology, which justifies premium pricing and helps them stay ahead of competitors. Netflix analyzes viewing behavior to recommend content that keeps users engaged; this strategy helps Netflix maintain high subscriber retention by emphasizing experience, relevance, and engagement, which drives strong CLV. These organizations understand that high CLV customers are worth much more than casual buyers. By creating experiences that foster loyalty and reduce churn, this integrated approach turns customers into long-term brand advocates.

IBM, once a pioneer in artificial intelligence with its innovative Watson platform, is currently facing challenges in maintaining a leading position within the rapidly evolving generative AI landscape. Unlike companies like Google, Microsoft, and AWS, which have built extensive AI ecosystems featuring scalable foundation models for business use, user-friendly products and platforms, and comprehensive global cloud infrastructure, IBM’s strategy has been more focused and tailored to specific enterprise needs. There is nothing wrong with this; it’s all about strategy. IBM focuses on large, custom enterprise solutions, primarily promoted through B2B sales and consulting, rather than user-driven marketing. IBM targets broader enterprise segments and engages in vertical or domain-specific applications. While Google, Microsoft, and AWS moved quickly in this space, they engaged with high CLV customers.

Additionally, IBM focused on consulting-led and customized solutions, which limited its appeal to startups, developers, and mid-sized businesses seeking user-friendly, plug-and-play AI options. The company’s approach to customer centricity appears to be a blind spot compared to the perception of Google, OpenAI, and others as the ‘frontline runners’ in GenAI. Is it driven by the goal of maximizing customer CLV? It’s a point worth considering.

Top  Indian Companies Managing CLV Effectively

In 2023-24, Tata Companies’ combined revenue exceeded $165 billion. As of March 31, 2024, there are 26 publicly listed Tata enterprises with a total market valuation of over $365 billion. While Tata Group companies demonstrate strong examples of Customer Lifetime Value (CLV) management—not just within individual brands but across the entire conglomerate—they still have a long way to go in fully integrating digital platforms with marketing strategies to close current gaps. Tata Group’s diverse portfolio, spanning 10 major sectors—Automotive, Technology, Steel, Consumer & Retail, Infrastructure, Aerospace & Defense, Financial Services, Travel & Tourism, Telecom & Media, and Trading & Investments—includes well-known brands like Tata Motors, Tanishq, Trent-Westside, Zudio, Titan, Croma, Tata Neu, Tata Cliq, Tata 1mg, BigBasket, and others, creating cross-selling opportunities. Although somewhat fragmented, the ecosystem is evolving into a seamlessly integrated platform across all marketing and branding dimensions, especially in perception and user experience. As part of this effort, Tata Neu was launched as a rewarding platform that consolidates shopping loyalty across all Tata Group brands. Shoppers earn Tata NeuCoins, which can be redeemed within the app for purchases. This aligns with the core idea behind Tata Neu: serving as a new channel for customer acquisition, loyalty programs, lead generation, and ultimately enhancing data profiling capabilities to increase CLV. It represents a strategic approach to turning customer interactions into long-term value—a key driver that still requires further development. Achieving a comprehensive view of broader customer engagement across group companies and providing consistent experiences throughout the entire ecosystem remains a significant challenge. The Tata Digital brand tagline, “Creating experiences that simplify and enrich lives every day,” highlights this vision. However, consumers have yet to fully experience this promise in terms of customer satisfaction.

The Mahindra Group is another excellent Indian conglomerate that effectively applies CLV principles, particularly through its emphasis on community, loyalty, brand trust, and ecosystem thinking. Mahindra operates in diverse segments, including Automotive, Financial Services, Farm Equipment, Renewable Energy, Real Estate, Technology Services, Logistics, Emerging Business, and Equity Investments. Club Mahindra is a leading subscription-based holiday brand, an example of a long-term and annuity-driven CLV. Mahindra leverages CLV through a mix of loyalty, lifestyle integration, and emotional purpose. By aligning business strategy with long-term value creation across different life stages and regions, Mahindra turns customers into lifelong brand participants. Our research reveals opportunities for NPS and CLV improvement by analyzing customer feedback from various channels to identify customer challenges and provide post-sales support for building long-term customer relationships. Implementing multi-channel support services can also enhance the overall customer experience.

HDFC Bank offers a wide range of financial products to attract new customers and provide them with the information they need, while also focusing on customer retention. This is achieved by offering a comparative view and cross-selling loans, insurance, investments, and credit cards through a unified account experience. HDFC’s collaboration with corporations helps attract high-value, long-term customers by offering corporate benefits and pension plans. HDFC reports a total of 23,920 banking outlets and 8,738 branches, including overseas locations. The bank’s customer satisfaction score (NPS) for FY23-24 is 71, based on a customer base of over 93.2 million, which is quite notable. According to HDFC’s annual report for FY23-24, they received over 3.3 million feedbacks across key channels. Quoting the report – “HDFC uses Net Promoter Score (NPS) branded as Smile Score – a simple and easy-to-understand metric that is reliable and valued. We have now embedded Smile Score and customer feedback as an outside-in perspective for measuring process efficiency.” To promote customer-focused initiatives, the bank launched HDFC Bank NOW – a platform that consolidates all its digital services. Simplifying the customer experience when purchasing new products, enabling hassle-free onboarding, providing access to offers, or utilizing the bank’s services remotely are key steps toward increasing CLV.

ICICI Bank’s portfolio provides a wide range of financial and banking services for both B2B and B2C segments. Its subsidiaries operate in investment banking, life and non-life insurance, venture capital, and asset management. User-friendly processes, the ability to offer integrated products across life insurance, loans, and investments, and excellent customer support are key differences for ICICI. The bank is unmatched in providing customer service. Professional, precise, and perfect, aligning with their marketing tagline – “Khayal Apka,” which means ‘we care about you.’ ICICI’s commitment makes each customer feel valued and important. As part of the CLV strategy, retaining high-value customers through essential services and personalized offerings is a major achievement. With more than 30 million users on iMobile Pay, ICICI manages a sizable base focused on delivering the best customer experience.

Flipkart manages a large customer base, operates a loyalty program (SuperCoins), and integrates product financing. The philosophy of customer retention through rewards, personalized offers, and flexible payment options works in favor of the organization as part of their CLV strategy. Flipkart’s new brand tagline – “Naye India Ke Saath” (with the latest India) – reflects their evolution and focus on engaging a broader customer base, including the Gen Z Indian audience. While Flipkart primarily competes with Amazon India, it still has a long way to go in building loyalty and increasing CLV. Key areas needing reevaluation include the supply chain, assortment challenges, return policy, refund timelines, and expedited delivery for repeat customers. Flipkart relies more on fragmented third-party logistics, and seasonal or festival flows often reveal fulfillment issues. The focus on discount-driven customer acquisition may attract customers with low CLV rather than loyal buyers. Flipkart wins on a large scale thanks to its extensive reach, attractive discounts, and successful festive sales.

Amazon India has developed a strong Customer Lifetime Value (CLV) strategy by focusing on long-term trust, a customer-first approach, convenience, ease of use, and a robust supply chain ecosystem. Its flagship Prime membership encourages increased purchase frequency through fast delivery, exclusive deals, and bundled services. Amazon guides its business based on principles such as customer focus, innovation, commitment to operational excellence, and long-term planning.

Amazon India is expanding its fulfillment infrastructure into tier 2 and 3 cities, upgrading facilities to accommodate Indian weather conditions, and deploying technology to enhance customer convenience. To capture a broad consumer base and increase CLV, it is launching smart stores, offering car and bike insurance for the masses, providing train tickets in collaboration with IRCTC, and empowering over 5 million local stores and businesses with Amazon Pay UPI and Amazon Pay Later digital payments infrastructure.

Asian Paints (Bringing joy to people’s lives®) evolved from merely selling paint to offering “Safe Painting Services,” waterproofing, color consultancy, and décor advice. This strategy transforms a low-frequency product (Paint) into a repeat engagement opportunity. Value-based marketing plans enable Asian Paints to move beyond just selling paint and become a long-term home décor partner, thereby maximizing both revenue per customer and customer retention over time. Innovation, design, and fresh thinking have helped Asian Paints successfully shift from a product brand to a comprehensive experience brand, extending customer engagement and lifetime value through services, design, and trust. As part of Asian Paints’ governance policy, they state to “Develop robust business strategies, agile operations, strong risk management, and foster a culture of innovation and adaptability.” Asian Paints achieved a 70 NPS for FY24-25, indicating high customer loyalty and satisfaction. This also signifies that the company is building a positive word-of-mouth reputation and is likely to be experiencing significant customer retention and growth. Our research indicates that Asian Paints continues to lead in premium home décor, expanding its network of physical stores to provide immersive, end-to-end solutions that redefine experiential luxury.

Many marketing organizations, despite their substantial resources, presence in multiple regions, and management support, often face business challenges that limit their ability to generate ROI from marketing investments. These organizations will need to adopt an approach to AI integration, mastering the art of algorithmic marketing rather than relying on a feel-good approach in the near future.

We all know that today’s CMOs face more challenging questions than ever before. Board members and CFOs are scrutinizing the measurable ROI; superficial metrics can no longer justify substantial marketing spends. In 202X, the most successful brands will be those that can generate more revenue, enhance their Quality of Revenue (QoR), and become the most recommended and memorable for delivering exceptional experiences.