How to increase Customer Lifetime Value?
SME Series 1.6
Marketers devote time, effort and all the possible resources to track their visitors’ journeys from start to finish, improve, content and provide the best customer experience possible. Organizations that want to ensure long-term success include measuring the customer lifetime value in their growth strategy.
Before we start on how to increase the customer lifetime value, we should focus on the essential question here: what is Customer Lifetime Value?
Customer Lifetime Value or CLTV represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. This approach helps your company or organization to demonstrate the future value they can generate from their marketing initiatives. Customer Lifetime Value helps you think about how to optimize your acquisition spending for maximum value rather than minimum cost.
Why should you calculate Customer Lifetime Value?
The key reason why you should calculate or consider the customer lifetime value is for the sole reason of customer retention. Selling more to the old loyal customers will bring significantly more profits and underline the importance of promoting customer loyalty. If satisfied, these customers will also help you grow your business by recommending you to brand to friends, family, and other associates through word of mouth.
Essentials of increasing Customer Lifetime Value
1. Study your Customers
It is very important for you as a company or a brand to understand your customers. Customer analytics through surveys or questionnaire is helpful in identifying & exploit trends among clients. Being knowledgeable about your loyal customers is essential, and also sends a message to them that you care. If you own a subscription website, ensure to collect personal information like birthdays and anniversary dates. You can present them with a small discount or a free goodie on their special day. This small gesture by you won’t go in vain but will help in building a stronger customer relationship.
2. Personalize your Service
Personalization of your service to the customers will always benefit your company in terms of increasing the customer lifetime value. It is recommended to personalize your services because this shows that you care about your customers. According to a survey, 76% of the customers believe that customer service is a representation of how a business values them. A little effort to groom your services for a customer who has been loyal will make your company stand out and retain most of your customers.
Communication with your customers via email or social media provides an inexpensive way to converse with them. Personalized communication is one of the main tactics used by companies to engage their customers or to increase customer lifetime value. It is important because this personalized communication shows and increases customer satisfaction & the overall loyalty by the customer towards your brand. This type of communication is more direct and benefits the brand i.e. triggering customers to purchase at the moment. Communicating with them directly also helps in getting you instant feedback on the area you can improve.
4. Offer Rewards/ promotional offers:
Customers love rewards or promotional offers. So come up with very exciting rewards or promotional offers to keep them engaged and increase your customer lifetime value. You can offer them a free gift after they have purchased a certain amount of services or some percentage of their amount is deducted after a certain amount of service. Reward programs are a terrific way to keep your loyal customers stick to your brand and not look out for any other in the market. If you have few customers to who comes back to your brand, you can offer them a reward program like a certain amount of incentive for every penny they spend on your service.
5. Keep your website content fresh
Fresh and informative content is one of the main elements that pull in new visitors and potential customers. Keep your website content fresh & updated by publishing blogs related to the services you provide or how you can benefit the customers. Try to post blog stories related to the latest business news, key-takeaways from white paper & anything trendy from your own industry. This will help in engaging the customer and will increase traffic on your website as well as increase the customer lifetime value.
To learn more on how to increase your customer lifetime value, connect with us at Insperme Consulting.