Customer lifetime value (CLV) is a prediction of the net profit attributed to the future relationship with a customer: it shifts the focus from quarterly profits to the long-term health of their customer relationships. Be sure to read this post if you haven’t already calculated your current average customer lifetime value. It’s a crucial benchmark to know before you work on increasing customer lifetime value.
As an entrepreneur, aspiring business owner or chief marketing officer (CMO), it’s important to take this into account. You have great influence over the brand, and the CLTV, so use it to increase the lifetime value of your customers. So, create an inspiring brand and engage with your customers – they want to be part of your story.
Here are a few ways to engage with your audience and increase your customer lifetime value:
Your Brand Story
One of the most important responsibilities you have when it comes to increasing customer lifetime value is shaping your brand: you need to take ownership over how you present yourself to your customers and understand how they see your company. There are a few ways to do this.
Make Your Brand Story Believable
Customer advocates are the pinnacles of marketing: they extend your brand authentically by publicly and enthusiastically telling your story. When you leverage customers to advocate for your product, your brand story becomes more believable. Make it easy for customers to express their satisfaction publicly, whether it be via social media, online reviews, surveys or emails.
Identify and Evaluate Customer Touch-Points
These go beyond basic marketing materials to include the office, environment, customer service protocols, email communications, voice communications and social media presence. Take the time to evaluate each touch point carefully and adjust your team’s marketing strategy as necessary.
Analyze social, survey and web analytics data to understand how important each element of your company’s non-price value propositions are to your customers. For example, offer something like free shipping, carry one-of-a-kind products or have a positive social mission. Prioritize the factors most important to your customers – this will increase the value they bring to your current and future customers so that they will become more engaged with the brand and their future expected value will increase.
Customer loyalty is critical to the success of your go-to-market strategy and your marketing budget – it costs between 4 and 10 times more to acquire a new customer. It’s much easier to reach loyal customers because they already have an established relationship with your brand.
To create loyal customers, you have to make them believe what you believe. Do this by ensuring your company is behaving authentically. Each customer touch point should be a consistent experience, from customer service to post-sales communications. Authenticity, consistency and ease of doing business are the keys to customer loyalty.
To increase customer lifetime value, infuse brand loyalty into the customer experience. Loyal customers have a stronger interest in your business and can become advocates for your mission and values. Here are some ways to do this:
Loyal customers are much more likely to recommend brands with good loyalty programs, and these experiences often translate into revenue for your company. A good loyalty program isn’t limited to just discounts: it gives your customer something of real value. That may include VIP tickets to an event, cashback on specific purchases or a free gift basket of their favorite candies. The rewards must fit the individual customer’s needs in order to be valuable. Use gamification to increase your customer lifetime value by keeping your customers engaged & excited.
Feature Your Fans
Leverage your digital assets and social media marketing strategies and feature posts, photos and reviews of your fans enjoying your products. Embed social media posts from fans who have shared your content or said something great about your brand to their followers. Put them in the spotlight and let them know how much you appreciate them. They’ll see the reciprocity and make your brand a priority, which can make increasing customer lifetime value painless & enjoyable.
At the end of the day, customers want to feel special – they want to know that your brand cares. The same generic email or message won’t work; it’s all about giving your customers something extra. Serve them with personalized content to encourage them to take action. Whether it’s email, social media or a scroll popup on your website, nudge buyers towards the desired outcome.
Reactivate Your Past Customers
As you’ve heard time and time again, it’s easier and more cost-effective to sell to your existing customer base than it is to acquire new customers. While you should focus on growth, it’s important to keep your past customers engaged. Offer them special sales to reward them for long-term loyalty, offer new products & services to them first. Even if you haven’t reached out to your past customer base in a while, there’s always a way to reengage a percentage of them. Figure out how to best reactivate past customers, and you’ll be able to increase your average customer lifetime value.
Customer Service for Increasing Customer Lifetime Value
Enhancing the customer experience involves making sure that they receive the best possible service during interactions before, during and after the purchase. It’s unacceptable to give poor-quality service to your buyers, so respond to them in a timely manner and hold their hand as you help them with whatever they need. Buyers don’t have tolerance for lacklustre service. In fact, many of them will take their business to a competitor within a day of experiencing poor customer service.
Here are some ways to take care of your customers and boost customer lifetime value:
Align Your Resources
Allocate the necessary resources to offer your customers top-notch service: it’s one of the best ways to build relationships with your audience. Get to know your customers, start sparking conversations that matter to them and address their needs. Reach out to them on social media or give them a phone call and ask questions. In addition, your team should be able to respond to complaints and broadcast announcements in a professional manner.
Take Customer Advice & Give Them Credit
One great way to keep your customers loyal to your brand is to constantly improve. Instead of just going by the numbers, try to figure out what they want next. Create a poll with a few of the ideas you’ve been thinking about and send it out via your blog, social media accounts and email.
If you want to maximize your opportunities when it comes to increasing customer lifetime value, always leave room for your customers to make suggestions and offer some kind of incentive for participating, even if it’s just a gift card or early access to a new feature. It’ll make a huge difference in the number of participators.
If you end up making a change or update based on your customer’s feedback, give them credit for coming up with it. Announce it through all of your marketing channels and send them something to show your appreciation.
Using Upsells & Cross-Sells to Increase CLV
Be sure to utilize upsells & cross-sells to increase customer lifetime value when appropriate.