5 Ways To Increase Customer Lifetime Value
Customer Lifetime Value is a metric we have discussed in a number of previous blogs. It is one of the most important metrics to understand not only in marketing, but also when running a business.
Your current customers aren’t just worth the money they attribute to your business right now - they will have a future value too. If you can retain their business!
Utilising your existing database is just as important as attracting new customers. As discussed in this blog, it is five times more expensive to acquire a new customer than it is to delight an existing one.
So, why not focus on increasing Customer Lifetime Value, rather than just increasing your customer count?
Let’s take a look at some tactics to help you do just that!
1. Upselling And cross-selling
If a customer is using one or more of your products/services already, then you have a chance to upsell or cross-sell other products or services to them. For someone to have spent money with you means they must trust, like and know you. The groundwork is already done so why not leverage this and increase their purchasing frequency?
However, in order to do this, you need an up-to-date, cleansed database or CRM system. That database should contain:
- previous order history
- website visit history
- any communication your database has had with your team.
This will allow you to automate processes to help with cross selling and upselling, either by:
- notifying your sales team when a website user visits a product page
- automatically sending updates to your audience on related products and services.
2. Personalised Communication
Today, there is no excuse not to personalise customer communication. This means more than just adding a First Name tag to the emails you send. Your CRM should allow you to communicate based on:
- the web pages a person has visited
- the products they have purchased
- the platforms they use.
However, you can take it one step further and give your audience a personalised experience on your website. By understanding who they are (and which persona they are aligned with) you can give them a completely unique website experience.
This means you can tailor your sales messaging for each person who visits your site so it aligns with their challenges, interests and pain points. What better way to enhance purchase frequency and value?
3. Make It Easy To Buy
Making the buying process as easy as possible is absolutely crucial to increasing Customer Lifetime Value.
If you make the first purchase of a buyer’s relationship with you difficult, you can kiss goodbye to any further sales from them. This doesn’t just refer to improving UX on an ecommerce website. It is much more than that…
Make your sales process as simple as possible. Ensure your customers always have a single point of contact. Have a clear sales process for your customers to work through. Give them clear actions on how and when to buy.
Being easy to buy from seems like a no-brainer. But there are countless examples of small hurdles that make it unnecessarily difficult to buy, for example:
- disorganised sales processes
- lack of information readily available
- lengthy waits for sales proposals and pricing.
All of these things give your customers and opportunity and excuse not to buy from you.
4. Regular Communication And Re-engagement
It may seem simple but communication is key. A study by Econsultancy showed that 86% of buyers are willing to pay more for a great customer experience. Communicating with your customers regularly will not only keep you top of mind, it will also show them that you care – especially if you continually deliver content that is of value to them.
Remember we mentioned personalised content? This is key to ensuring you deliver relevant, timely content to every single person in your database.
Set up nurture sequences to educate customers on the products and services they have purchased. Inform them when their service contract expires. Tell them about related products and services at specific times of the year.
The best people to answer what you as a company can do better are your existing customers. They are subject to most, if not all your teams and are likely to have a great insight to how your processes and services can be improved.
This should be an ongoing evolution with an aim to collect customer feedback every six months to a year. You could do this in the form of an NPS survey, a series of courtesy calls or by encouraging customers to give you Google Reviews.
Doing this will allow you to understand where potential friction points are with your customers and whether or not your products and services need improvement.
Providing opportunities for your audience to feed back makes them feel valued. Making changes as a result of this feedback makes them a part of your company. Who wouldn’t want to buy into something they have helped to improve?
Increasing Customer Lifetime Value should be a major focus when it comes to business growth. Increasing your CLV means you get more from the customers you already have and they will get more from you as a supplier.
Now, isn’t that a win-win?