How To Increase Lifetime Value Of Customers

How To Increase Lifetime Value Of Customers

Throughout this guide, we are going to discuss methods to improve repeat customers and increase lifetime value. But first…

What Is Customer Lifetime Value And Why Should You Care?

As businesses continue to grow and strive for competitive advantage, it becomes increasingly important to understand what customer lifetime value (CLV) is and why it matters. CLV is the estimated monetary value of a customer over their lifetime. A customer with a high CLV is valuable to a business because they are likely to spend more money with the company than other customers. Additionally, companies that can identify and retain high CLV customers are more likely to succeed in the long term.

But before we dive into the best practices to increase lifetime value of a customer, let’s look at…

How Do You Calculate Customer’s Lifetime Value?

The customer lifetime value (CLV) is a key metric used in business decision-making, therefore every business should be able to calculate customer lifetime value in order to work out ways to increase lifetime value of each of their customers.

Put simply, the CLV is the value of a customer over the course of their lifetime and can be used to calculate things like how much to charge for a product or how much to spend on advertising.

The calculation is simple: take the total revenue generated by a customer over their lifetime and divide that figure by the total number of years that customer will be with your company. CLV is an important tool for businesses because it helps them identify which customers are most valuable and worth keeping around.


increase lifetime value
increase lifetime value

How Can You Increase Lifetime Value Of Each Customer?

There are a few things you can do to increase how much a customer is worth to you and your business. Throughout this guide, we aim to walk you through the best practices to increase lifetime value of customers.

So let’s dive straight in

Customer Service is key

1) Offer An Exceptional Service And Deliver A Great Customer Experience.

When customers entrust you with their cash, they expect you to provide them with what they are looking for. There is no misunderstanding here – you, I and everyone else knows this.

They are also expecting a really good working relationship right from the onset. Sure, different customers have different expectations but the reality is they expect a solution to be fixed and you have outlined that you can remove any worry over the problem they had.

A pretty standard way of doing business.

But you would be surprised at how many fail on this simple process and wonder why they have such a high churn rate.

Let them know how their project is doing.

Let them know where their product is.

If you are on top of everything, keeping in contact with them and offering a great customer experience, you increase the likelihood of people working with you again and wanting to return to either get your service or get your product another time.

There are some really exceptional players in every industry and they are there for a reason – they provide exceptional customer journeys and excel at what they set out to do.

In their mind

2) Stay In Their Mind

97% of people that go to your website or interact with your brand for the first time, don’t convert.

And by convert, I mean, they don’t take an action that results in the sale or the lead form or the prospect that you were looking for.

Just because they don’t convert right away, doesn’t mean they will further down line. They might be researching when they visit your site or comparing you to other businesses.

Putting processes in place to ensure that you are in their mind on multiple occasions is key to driving up revenue as well as ways to increase lifetime value of customers.

If you follow up with them and stay on their radar, utilizing re-targeting ads or any of the myriad of marketing opportunities out If you maintain contact with them and remain on their mind by staying on their radar using re-targeting campaigns or any of the other available marketing opportunities, you keep that awareness in mind and you can follow through with the seven-step marketing program.

Put simply, a consumer needs an awareness of or involvement with your brand at least seven instances prior to making any decision about whether or not to engage your brand in the future.

Automation is key

3) Marketing Automation Is Key

Two of your best allies in this game is utilising a CRM with email automation.

If you spend all this time, cash, and energy into driving visitors to your website, getting them to fill out a lead, to then completely forget about them, is a complete waste of both your, and more importantly, their time.

By utilising your CRM with automation of email templates (use trigger points to get more specific) to set up automated processes so you can develop a funnel to continue nurturing these customers.

Make them as natural as possible in how they are worded so that it seems you have contacted them directly and you improve your chances.

Nurture them.

Ask for referrals

4) Ask For Referrals

One way to generate more sales and grow your business is to ask for referrals. Referrals are a great way to build revenue and increase lifetime value, as they can come from current customers or potential customers you know. When you ask for referrals, you’re likely to get positive responses from those who know you well.

There are many reasons to make referrals. Referred leads are more likely to buy from you than any other type of lead. Referrals also generate more sales for your business than any other marketing strategy.

According to a study by the Referral Marketing School, businesses that generate referral sales account for 85% of all industry growth! So why not take advantage of this powerful marketing tool?

Here are three tips on how to generate more referral sales:

  1. Don’t be afraid to ask for referrals – You’ve developed the trusting relationship with them. So, give them an opportunity and incentive to brag about their decision to their friends and their family. Make it clear that referrals are appreciated and will result in bonus rewards.
  2. Keep your referral program simple and easy to use – Your clients and network want a program that generates more sales, increases revenue, or grows their business with as little effort as possible so that they can run their business as usual while you increase lifetime value for each of your customers
  3. Clearly define your referral rewards – Include bonuses, discounts, and other unique benefits for referring friends and customers. This will make the program more appealing to participants and increase the likelihood that they will refer others.
  4. Make it easy to sign up new referrals – Include registration forms or an online referral form on your website or promotional materials. This way, participants can easily enter their contact information and refer friends or customers without having to leave your site or promotion.
  5. Make sure your referral program matches your business’s culture and brand image – We all know that having a strong brand image and a strong culture behind you ensures great revenue. So what if your referral scheme is then scammy, desperate or just outright awful, what does this say about your business? How will your customers interact with it?
Be a part of your clients businesses

5) Be A Part Of Your Clients Business

A lot of people forget that this is a transactional relationship that you are having with your clients. Business development is an important aspect of a successful business, and it’s vital that you retain your clients.

One aspect of this is to shout about them on your social channels. Provide case studies (with their permission of course) and recommend them to others in your network.

Retaining and developing your business’s clients is critical to the success of your company. By providing excellent customer service and maintaining a relationship with your customers, you can ensure that they return and recommend you to their friends and colleagues.

Keep up communication with your customers. Make sure you respond promptly to emails, voicemails, and other communications. This shows that you are interested in keeping the relationship active and ensures that they know what needs to be done in order for them to continue using your services.

Be responsive to complaints and suggestions and proactive in changing your service if required for it to be more relevant and ahead of the times.

Customer service is an essential part of creating a good relationship with your customers, and it’s important to remember that the customers are the ones who ultimately keep your business afloat.

Ask your clients for feedback

6) Ask For Feedback

In order to improve the quality of your business, it is important to get feedback from your clients. This can be done in a variety of ways, but one method is to ask them for their thoughts on your services or product. By getting customer feedback, you can ensure that you are providing the best possible service and products. Additionally, by retaining clientele, you will enjoy a higher rate of repeat business revenue and increase lifetime value. Therefore, it is essential to ask for feedback from your clients in order to maintain top performance in your field.

Here are some tips for keeping your clients happy:

  1. Make sure that you always have something new to offer your clients. Be prepared to change or update your services in order to stay ahead of the competition.
  2. Keep in mind the needs of your clients, and cater to them specifically. If they need assistance choosing a product, be sure to recommend one that fits their needs.
  3. Offer quality customer service at all times.

Appreciate the fact that they’re spending their hard-earned money with you put yourself in their shoes – what would you want, if you bought your service?

Online reputation

7) Online Reputation

Online reputation is important for any business, but particularly so for those in the technology and internet-based industries. Social media is a powerful tool for developing and maintaining a good online reputation, and businesses that neglect this important aspect of their marketing strategy risk losing potential customers to competitors.

Client retention is also vitally important for businesses in these sectors. If potential clients see negative reviews or complaints about your company on social media, they may be less likely to consider working with you. Likewise, poor customer service can have a devastating effect on brand reputation. If your clients feel neglected or mistreated when they need assistance, they are much more likely to turn to your competitors for support.

A good online reputation requires consistent attention and effort from business owners on all levels and will ultimately help you to increase lifetime value overall.

8) The Bottom Line Tells You Everything You Need To Know

It can be costly to generate new customers, as compared to keeping current ones. According to a study by Forbes, it costs five times more to generate a new customer than it does to keep an existing one. This is due in part to the time and energy required to attract a new customer, as well as maintaining that customer once they’ve been acquired.

Customer service must be attentive and responsive in order to keep customers happy, and businesses must also work hard to cultivate relationships with their clients in order to keep them coming back. By investing in these strategies, businesses can ensure that they maintain their current base of customers while also increasing sales.

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