How to Increase Customer Lifetime Value?
Customer lifetime value is one of the essentials of every business. The reason being is because it’s the total worth to your business of a customer over the entire period of the relationship.
Therefore, increasing the value of existing loyal buyers is an excellent way to drive growth since it often costs less to keep existing customers than to acquire new ones. Of course, finding new buyers is important, but it means nothing if you constantly lose regular ones. That’s why an international marketing agency can help you drive growth since it focuses entirely on improving your relationship with customers worldwide.
So, here we will see how to increase customer lifetime value with several best practices. Let’s start.
Listen To Your Customers
One of the best ways to increase customer lifetime value is to listen to your customers. That’s why you should always plan what you should do next, which means what do customers want next? Therefore, make a poll with several ideas that are in your head and send it out through your social media channels, blog, etc.
Furthermore, don’t forget to leave space for your customers to add a suggestion beside your ideas and make them a part of your poll. You can even provide a small gift for everyone that is involved, and be sure this will make a huge difference since it shows how much you value them.
Also, don’t forget to credit your customers for helping you decide. Even more, please don’t be shy at all and show appreciation for their feedback once you have the results on all your social media channels and platforms. In essence, let them know that you value their opinion. In addition, this is a fantastic way to find out what your customers want next and then sell it to them; therefore, both sides get what they want.
Make Your Brand A Community
In order to get to know your customers, you have to create a customer-centric marketing strategy, but to keep them loyal, you should also make your brand a community. If you don’t want to be a faceless brand, you need to bring customers together and into the world of your business. Help buyers work together to provide themselves with the best services and products you offer.
This community should have similar goals and aspirations, so give them space to engage with like-minded people in order to improve loyalty, and by doing so, you will increase the overall CLV. Once you practice this idea, your ACV average customer value will also increase since customers will feel like part of the community and stay even more loyal to your business as they engage more with each other. At the end of the day, that is the main priority and the end goal as well.
Improve the Customer Onboarding Process
Another way how to increase customer lifetime value is by improving the customer onboarding process. Onboarding is key to customer loyalty since buyers want what they want immediately. Therefore, if you can nail this part, you are going to provide your business with a happy and loyal customer.
So, once a customer knows they want something from you, they will like that product or service delivered yesterday, so to speak. And even if you have standard lead times, try to make everything as fast as possible since this will make your customer extremely happy and satisfied.
In addition, make sure to tailor your onboarding process to the customer’s needs. Of course, some of this will be trial and error but concentrate on your business and sales development teams to do what they know best in order to find a way to improve with new buyers.
Free Giveaways Are Always Helpful
You have found a good sales lead, you pursued them to become your customer, but now you want to keep them loyal. Well, yet another way to do so is through free giveaways since they are always helpful. In fact, in today’s competitive market, they are almost necessary.
Giveaways are a standard part of sales tactics, and the reason is simple – they work. Buyers love to get something every time they can, and it’s also beneficial for your business since it builds engagement and loyal relationships. You can even use it to get feedback for a new product. For instance, you can give away a new product, and customers will provide feedback on how good it really is; therefore, they will get something for free, and you will see the quality of the product and whether it’s good enough to put it on the market.
It’s valuable to mention that today, free giveaways are a necessity since if you don’t use this tactic, your competitors will. So, try to make the best out of it because it’s an easy yet efficient way to keep your customers coming back.
Make Customers Part of Your Content
For a successful business today, you have to use the best marketing strategies in order to keep customers coming back. Of course, the content you create is extremely important, but why not make customers part of your content from time to time or as a regular practice.
How? Well, the answer is pretty simple, and this tactic is highly effective. So, every time you ask yourself how to increase customer lifetime value, try to embed social media posts from customers who have shared your content.
It is even better if they share but also write something great about your product or service. If you put them in the spotlight, they will know that you appreciate them, and also, everyone likes to be influential today on social media, so they will for sure be thankful. In addition, they can become a valuable marketing asset since they will make your brand a priority precisely because you paid attention to them. Sharing them in your content regularly while thanking them for being your customers can result in them sharing your products and services more often.
Practice Cross-Selling and Up-Selling
When you are buying socks, you also expect to be asked whether you want new shoes. It’s part of an expected ritual both for the customer and the seller. And it’s a good one, too, since it connects pairing products. Therefore, whether it’s coffee with a croissant, wine with cheese, or anything else, it pairs perfectly, but it also adds value to the buyer and their overall customer experience.
The same goes with up-selling, as you should put yourself in the shoes of the customer. Think as they think – What do I get from this offer? Also, you can use tactics such as a discount if someone purchases two products, a VIP discount if they sign up for a year-long subscription, and so on. It’s somewhat similar to free giveaways; the difference is that the customer will purchase something for sure on this occasion and also be extremely satisfied since they get an idea of what more they can get.
And let’s be honest, everyone likes to get something more for less money, which provides a better customer experience that is important for you since they become loyal buyers.
Motivate Urgent Purchases
Motivating urgent purchases can be highly effective when it’s about how to increase customer lifetime value. Deals that don’t last more than 24 hours are oftentimes real winners, especially if you tell existing buyers about them via social media or an email. Be sure that at least some of your loyal customers will make a purchase in order to use this chance.
And even though this doesn’t sound so effective when it comes to existing customers, in fact, it is if you make it a more regular part of your business marketing. The reason is that people will get used to it and be hyped about when it’s coming next.
Also, there is always something exciting about the urgency of selling a product or service that lasts only 24 hours, or you can make it a seven days period. In any case, it keeps existing buyers excited, it’s engaging, and it’s beneficial for both sides. Once you get most existing customers, or at least half of them regularly being part of such an interesting rule, they will enjoy being loyal even more.
To Sum It All Up
Now you most certainly know how to increase customer lifetime value, which is more than important today considering the level of competitiveness present in the global market. It is one thing to attract new customers, which is also essential, but it is also highly important to keep them coming back again and again.
So, make sure to use these best practices all the time, and try to use them all without excluding some if possible. Don’t forget that being active continuously is vital in today’s sales world since everyone wants to outperform the other. That’s why you need to concentrate on these practices right away and make a powerful communication with your loyal customers that will last for years to come!
What is Customer Lifetime Value?
CLV or customer lifetime value is the whole worth to a business of a customer or buyer over the entire period of their relationship.
How to know the lifetime value of a customer?
Measuring customer lifetime value is – Customer Lifetime Value = Average Total Order Amount * Average # Purchases Per Year * Retention Rate.
What affects CLV?
The CLV has to account for marketing expenses, ongoing sales, customer acquisition costs, operating expenses, and the cost needed to make the service or product.
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