Winning new customers is an important goal for growing businesses, but it’s also a costly tactic. Reaching out to new customers, bringing them through a marketing funnel, and onboarding them is a long and drawn-out process.
For existing customers, however, the bulk of the heavy lifting has been done already. Once you’ve won over a customer, it’s many times more cost-effective to keep them than it is to reach new customers.
Increasing customer lifetime value (CLV) should be a significant target for all businesses – let’s see how you can hit the bullseye with CLV.
The Ultimate Guide to Conversion Optimisation for Small Business
1. Optimize your onboarding
The opportunity to increase your customer lifetime value starts early. Too many companies make the mistake of distinguishing between reaching new customers and building loyalty in existing ones, but in fact, you can reinforce your CLV long before anyone makes a purchase by optimizing your onboarding process.
Poor onboarding increases the likelihood that customers will make a purchase and then drift away from your brand. Personalizing the onboarding process builds a connection between you and your fans right from the start, ensuring a healthy CLV.
2. Make customer-centric content
Whenever your customers are raving about you on social media, this is a dual opportunity to reach out to new customers whilst making existing ones feel valued. Increasing your customer lifetime value is all about generating loyalty in your fans, and sharing user-generated content demonstrates that you value your customers.
Find, follow, or create hashtags around your product and when you discover your users implementing these hashtags in their own way, share the creations. This will develop a reciprocal relationship between your customers and your brand that reinforces loyalty and has customers coming back for more.
3. Value-led content
Your content output is a crucial tool in keeping an audience engaged and when you issue content that’s packed with value for your existing fans you’ll strengthen the relationship they have with your brand.
“Your email marketing, for example, should go to lengths to emphasize the problems being solved by your products or services,” says Rene D. Gutman, a marketer at Elitassignmenthelp and Revieweal. “Existing customers may be interested in new ways to use your services, for example, if you’re a software provider it’s likely that not every user is aware of all your features. Issue content that possesses tons of value and educates your users to build customer lifetime value.”
4. Customer service counts
One of the number one ways that brands degrade their customer lifetime value is by offering customer service on the cheap – this kind of thinking, that treats existing customers as disposable, is exceptionally costly in the long run and creates high rates of customer churn (the number of customers leaving your business in a given period).
After customers have been onboarded, your customer service provision is one of the primary interactions you’ll have with them, so make it count with personalized customer service and 24/7 support.
5. Listen to your customers
Customer feedback is an important tool for improving your service and although the maxim “the customer is always right” has become outdated, “the customer always has a point” is something you don’t want to forget.
Positive feedback and suggestions should be taken onboard and anything you implement can be publicized and credited to the customer – this proves to your audience that you listen to them. Negative feedback is equally important and provides an opportunity to do things better.
6. Reward customer loyalty
Rewarding customer loyalty is a tried and tested method of having them come back for more. When customers make repeat visits to your products and services, and when this is reinforced through a reward system, customer lifetime value starts taking care of itself.
Coffee shop reward cards, which offer a free drink after a certain number of purchases, make a great model for rewarding customer loyalty but there are plenty of ways you can reward customers. Often, incentivizing a second purchase by emailing out a discount code after their initial purchase can turn a sale into a repeat customer.
7. Offer customers something unique
Brands can never afford to be complacent with their customers and the digital world has allowed markets to become crowded with competitors. Offering your customers something they can’t find elsewhere is key to hanging on to them, ensuring introductory offers don’t lure them away.
“Providing unique resources and features in your products or services increases customer lifetime value and generates loyalty amongst your users,” says Jessica D. Kleiner, a writer at Uktopwriters and UKWritings. “You can use your specialist knowledge to provide problem-solving blog posts that answer complex industry-specific questions, or offer highly personalized products to your customers.”
8. Offer a generous return policy
Having a generous refund policy indicates to your customers that you’re a brand they can trust. It makes people more likely to take the risk on a purchase in the first place and, in the unfortunate instance that they seek a refund, it makes them more likely to return to your brand in the future.
Customers who have taken the time to learn about your products and services and made a purchase, and returned it, are still customers and they should be treated with equal respect and valued as customers who didn’t return your products. As a business, you can absorb the cost of returns to project a strong brand image and increase CLV.
9. Cross-sell and up-sell
Increasing your customer lifetime value isn’t just about encouraging them to return to repeat purchases of a single product – you can generate more revenue from existing customers through a process of up-selling and cross-selling.
Upselling entails encouraging customers to upgrade to more expensive versions of products they’ve currently purchased. Software providers, for example, can offer premium support packages. Cross-selling is about offering related products that customers may be interested in. Bundling products together into compelling packages is a great way to increase customer lifetime value.
For any business, your loyal customers are an essential resource, and deriving as much value out of these customers is a winning strategy. Customer lifetime value is bolstered by creating a strong relationship between your brand and your customers – build trust and loyalty and revenue will follow.
Guest author: Katherine Rundell is a marketing writer at State Of Writing and Essay Writing Services Reviews. She has a love of good coffee and travel, her two constant sources of inspiration. Also, she is a proofreader at Via Writing service.