Customers without any doubts are what keeps your business running. The other factors that contribute to the success of your business will be simply eliminated if you don’t have buyers for your product or service. Without them, the business will not last very long. Therefore, it’s worth putting time and effort in increasing your customers’ lifetime value.
It’s important to maximize what customers pay during the time they stay with you. Therefore, a lot of companies are monitoring Customer Lifetime Value (CLV).
What is Customer lifetime value? Simply put, this is a measure which shows how much profit you get from one customer while they stay with your company.
CLV takes into consideration the following factors:
- the amount of money a customer is expected to pay in a single purchase;
- the chances of that customer buying again;
- the cost of acquiring that customer in the first place.
Of course, there are other factors which can influence what a customer will pay during their lifetime but the above-mentioned characteristics are the most important.
Therefore, improving those parameters is a good starting point.
So, how do you increase the CLV? You can increase the rate at which people purchase from you or increasing the average cart value of each customer. But there’re also other ways to improve the customer lifetime value.
1. Is it easy for a customer?
You, for sure, want your customers to visit your funnel or website not only once in their lifetime. That’s why you should ask yourself, is your funnel/website user-friendly? Is it easy for customers to navigate and go to the checkout?
If the answer is negative you’re decreasing your chances of getting customers to buy from you again.
Think about how many clicks separate your customers from buying your product? The fewer actions a customer has to make to purchase, the better. Consider making the experience of customers on your website as simple and pleasant as possible.
If purchasing something from you takes only a click or two, the customer will likely be more willing to shop with you in the future. If it’s a lengthy struggle, they might look elsewhere, even if they like your product.
This is one of the examples when using funnels for your offer makes a lot of sense. Funnels make the whole process easy for a customer leading them step by step to the purchase. Read more about the advantages of having a sales funnel in our recent blog post.
It doesn’t mean that you should call your customers by their first name and treat them as friends (although if it fits into your business model, go ahead). What I mean under the personal approach is offering special deals and content based on their past purchases, wishlist or reaching out to them on special dates (like a birthday). The personalization encourages customers to come back to you resulting in an increase of customer lifetime value.
3. Be responsive
In our modern world of online technologies and social media, customers are expecting to receive a response to their queries within a few hours. Nobody wants to wait for days or weeks because they know that it’s possible in terms of technologies to reply almost instantly providing solutions to issues.
Great customer service is always appreciated that’s why by improving it, you’ll contribute to a customer’s loyalty to your brand.
4. Give them more to increase CLV
Don’t ignore the opportunity of upselling and cross-sell. This is the way to get customers to spend more, either in one interaction or over an extended period of time, which increases Customer’s Lifetime Value.
If you offer a nutritional supplement, you could offer a special diet plan book to go along with it as an upsell. For cross-selling, you can offer other products like a pre-workout supplement to go with their nutritional supplements.
These are, of course, only a few easy suggestions for increasing the overall value of customers over their lifetime but they anyway will pay big dividends for your business in the long run.
To learn more about digital marketing and sales strategies join our Facebook group of like-minded people with weekly Q&A sessions and an enormous amount of useful content.