Want to increase your customer lifetime value (CLV)?

You’ve come to the right place. In this article, I’ll give you 21 ways to increase CLV.

Ready? Let’s jump right in.

What is Customer Lifetime Value?

Customer lifetime value (CLV) is a statistic that tells you approximately how much revenue you’ll make from a customer over the course of their relationship with your business.

For example, let’s say your best customers spend $10 per month, every month, for 20 years, while your worst customers spend $10 once only.

Customers in the former category would have a lifetime value of $24,000 each, while those in the latter category would have a lifetime value of $10. If most of your customers fall on the lesser-paying end of the spectrum, your average CLV might be something like $1,000.

CLV is an important sales metric to track for many reasons. It helps you understand the sales cycle, customer acquisition costs (CAC), and can help you optimize your sales, marketing, and customer service strategies to make more money.

Better yet, understanding your CLV gives you a path to increase it – and increasing your CLV can dramatically improve your business’s cash flow and profitability.

Ways to Increase Customer Lifetime Value

There are two primary ways to increase customer lifetime value:

  • Get existing customers to make new purchases. You can get your existing customers to make more purchases, either by rebuying products and services they’re already familiar with, or by getting them to invest in something new.
  • Increase the dollar amount of each purchase. You can also increase the dollar amount of each purchase.

The following tactics will attempt to accomplish one or both simultaneously.

1. Improve product and service quality.

We’ll start with some of the basics. The most obvious way to increase CLV is to simply improve the quality of your products and services.

Think of it this way; you go to a restaurant and have an amazing meal. Are you going to go back there in the future? Probably, right? That’s because when we get good value for our money, we often want to repeat the experience.

With better products and services for your customers, you’ll get a steady stream of repeat purchasers.

2. Make it easier to shop with you.

Increase customer convenience. It should be remarkably easy to shop with you.

Customer logins should be seamless, the shopping and checkout process should be intuitive and fast, and you should allow your customers to pay in a variety of different ways.

3. Offer exemplary customer service.

If you want to build better customer relationships – the kind that encourage customers to come back to you again and again – you need to offer exemplary customer service.

If a customer has a concern or complaint, it’s your responsibility to answer it and make up for it however you can. If they need information or assistance, provide it as quickly as possible.

Even one bad customer service experience could persuade a once-loyal customer to never work with you again.

4. Imply urgency.

You’ll get more purchases from people if you imply some degree of urgency.

Encourage your customers to act quickly for a specific reason; perhaps the discount will expire soon or the product will only be available for a limited time.

It’s a great way to get customers to act (and, typically, spend more).

5. Give your customers occasional surprises.

Meeting expectations is always a good thing, but blowing expectations out of the water is even better – especially since surprise is so tightly linked to memory.

When you go out of your way to (pleasantly) surprise your customers, they tend to remember your brand – and they’ll be much more likely to shop with you again in the future.

A surprise discount or a freebie included with your shipment can work wonders.

6. Make returns easy.

Occasionally, your customers won’t be happy with your products – no matter how amazing those products are. In situations like these, it pays to make the return process easy.

It gives customers confidence that you’ll stand by them and do what it takes to make things right.

7. Offer complementary products and services.

Reach out to your existing customers and offer complementary products and services. If they recently bought a video game console, consider offering controllers, headphones, or even a gaming chair to complement it.

If they recently bought a set of power tools, a set of backup batteries or a collection of alternative attachments could be the perfect recommendation.

8. Make real-time recommendations.

Don’t wait until your customers have already made a purchase to start recommending things. Instead, make recommendations in real-time, especially if your customers are primarily shopping online.

When they’re looking at a desk for work, let them know that customers who bought that desk also tended to buy a chair and an extra monitor; it’s a great way to increase the average size of a customer purchase (and inform your customers at the same time).

9. Create customer accounts.

Most online brands already do this, but make sure your customers have the opportunity to create complete customer accounts. It’s an easy way to secure their loyalty, at least temporarily, and it makes their subsequent purchases with your brand even easier.

Plus, it gives you the chance to collect more data on your customers and tailor the online shopping experience to their own personal needs.

10. Personalize everything you can.

While you’re at it, try to personalize the shopping experience as much as possible. That could mean giving each customer a list of personalized product recommendations every time they log into your store.

It could also mean auto-loading their preferences when shopping for specific items; for example, you might “remember” their shoe size when they’re shopping for a new pair.

11. Understand and point out customer needs.

Customer engagement is huge for CLV. That’s why it’s your job to better understand and point out customer needs.

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What are your target demographics concerned with and how can you address those concerns? For example, you may learn that your ideal customer desires greater environmental sustainability.

From there, you can send personalized email recommendations for products like solar panels or eco-friendly cleaning agents.

12. Highlight customer stories.

Take the time to show off some of your customers. Interview them or simply post about them as the “customer of the month.”

Highlighting customer stories through social media, or through other marketing channels, will have a few impressive effects on CLV. For starters, the customer you highlight will likely be thrilled – and they’ll be more likely to remain a lifetime customer.

The increased visibility will also increase customer engagement across the board, encouraging other customers to spend more time and money with your brand.

13. Give customers rewards.

Customer reward programs are a great investment for customer loyalty. You don’t need anything fancy.

Allow customers to accumulate points with every purchase and give them a list of rewards to purchase with those points. Or just give them a discount on their purchases every so often.

As long as there’s some reason to shop with you, instead of a competitor, your customers will keep coming back.

14. Implement retargeting.

Retargeting ads are designed to target people specifically based on their past behavior. Maybe they’ve visited your site in the past, but they never made a purchase. Or maybe they purchased something recently, but you want to sell them on something else.

Either way, it’s an inexpensive and efficient way to target the existing customers and almost-customers who are probably on the verge of buying something from you.

15. Encourage email newsletter subscriptions.

Get your customers to sign up for an email newsletter; you can incentivize them by offering a discount or something for free (such as a whitepaper or eBook).

Once subscribed, you’ll have the potential to market to them indefinitely, sending them news about your latest products and special offers and discounts.

Email is one of the least expensive marketing strategies, and it’s even more efficient if you automate it.

16. Offer discounts for repeat customers.

You know and love your best customers, so go out of your way to make their experience more pleasant. That could mean extending special discounts or exclusive offers their way or giving them some kind of “VIP” status.

It’s a great way to keep your loyal customers loyal and encourage more purchases from new customers as well.

17. Show customer appreciation.

Your customer loyalty program is a great first step, but you should consider showing customer appreciation in other ways as well.

For example, you could have a “customer appreciation” day marked by steep onsite discounts – or you could even host an in-person event, like a speaking engagement or a celebration of your store’s anniversary.

It’s a way to kind of “rally the troops” and build better brand-customer relationships.

18. Establish subscription services.

Want your customers to pay more on a consistent basis? Consider adding optional subscription services on top of your existing offerings.

For example, you could replicate the Amazon Prime strategy and get your customers to pay a monthly fee for privileged services like fast shipping (or peripheral offers).

Just make sure the monthly subscription fee is worth it.

19. Win back inactive customers.

Sometimes, customers become idle, often due to indifference or a bad experience in the past. But you have the opportunity to win these customers back!

Send them an email, or even consider reaching out to them personally. Give them a special offer to win back their loyalty, or simply ask them if everything has been to their satisfaction in the past.

A strong pitch and a genuine effort to understand the situation could be all it takes to turn things around.

20. Use surveys to better understand customer needs (and improve your offerings).

Take the time to survey your customers and better understand their needs.

Are your customers happy with the quality of your products and services? What about your prices? How do you compare to the competition?

The better you understand these variables and others, the better you’ll be able to serve your customers – and keep them loyally paying.

The Advantages of Boosting Customer Lifetime Value

Boosting your company’s customer lifetime value (CLV) can help you in several distinct yet overlapping ways.

For example:

  • Increasing revenue. The obvious benefit of a higher CLV is that your customers will, on average, spend more with your business. This will increase your business’s revenue, without increasing your costs proportionally – thereby increasing profitability as well.
  • Improving customer loyalty. Improving CLV is also a way of indirectly boosting customer loyalty. When your customers are more loyal, they’re harder to lose, meaning you’ll have a stronger, more established customer base that’s more resilient to volatility in response to company changes. Better yet, it means you’ll have a better chance of creating brand evangelists who recommend your brand to others.
  • Reducing customer acquisition costs. A higher CLV can also reduce your customer acquisition costs (CAC) in two distinct ways. First, you’ll get more value out of each customer you attract, allowing you to keep increasing revenue without being as aggressive in sales, marketing, and advertising. Second, you’ll have a built-in outlet for word of mouth advertising, as your more loyal customers do more to promote your brand for free.

Want to start increasing customer lifetime value? Watch this video for more tips on increasing CLV.

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