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How to Increase the Lifetime Customer Value
Buy the customer, not the sale. A cliché that nonetheless couldn’t hold more truth, when it comes to the long-term success of any business.
Customer lifetime value (CLV) measures a customer’s total revenue or profit throughout their relationship with your business. Not just their own purchases, but the value they generate through recommendations, word of mouth, and positive feedback.
Even a minor improvement in your brand’s average customer lifetime value can translate to a significant boost in performance and profitability. But what are the most effective ways to maximise CLV, as practised by the most successful businesses on the web?
1. Listen to Their Feedback
There’s no better way to drive loyalty and encourage repeat business than to listen to your customers. And not just listen to them, but actively encourage their feedback and ensure they get a meaningful response. This not only helps you identify common pain points and areas for improvement, but makes your customers feel valued.
2. Launch a Loyalty Program
An effective loyalty scheme encourages customers to spend more money, more often. It’s a simple yet crucial way to ensure they get something tangible in return for their loyalty. If you don’t, one of your competitors will. The more you do to make them feel appreciated, the more they’ll reward you with their long-term loyalty.
3. Prioritise Personalisation
There’s a lot you can do to bring a personal touch to your business model. Offer personalised product recommendations, send emails and offers based on past purchases, perhaps even implement a dynamic pricing strategy to reward your most important customers. Even just reaching out on occasion with a genuine, personal message of appreciation can have a huge impact.
4. Interact With Your Community
Community engagement builds trust, establishes rapport, and makes your customers feel connected with your brand. Stay active on social media and respond publicly to every comment. Encourage your customers to share their experience with user-generated content (UGC). Organise special events, contests and giveaways to drive engagement. You could even launch a referral program that rewards existing customers for sending new leads your way.
5. Provide World-Class Customer Support
Quality customer service isn’t just about resolving complaints. It’s about supporting them throughout every step of their journey, and leaving a lasting impression. Make it as quick and easy as possible for people to contact you, ideally via multiple channels. Show every question and query you get the same high priority – not just those of a negative nature. And if you do bring a chatbot on board (which can really lighten the load), don’t become too reliant on it – your customers still expect and deserve a human voice.
6. Formalise Your Assurances
Loyalty will always be tested when there’s a better deal on the table. Or at least, a cheaper, faster or more convenient offer on the same product/service. It’s one thing to say your deals are unbeatable – it’s something else to formalise these assurances. Price-match promises, money-back guarantees, fast and free returns, guaranteed delivery windows – always back your word with tangible warranties.