A business’s lifeblood is its customers. Without them, you would not have a business. Your top priority as a business owner should focus on keeping your customers happy to ensure repeat purchases. Below is an explanation of customer lifetime value and ways to help your business increase Customer Lifetime Value.
What is Customer Lifetime Value? (CLV)
Customer lifetime value is the total financial value or worth of a customer to a business over the entire length of their relationship. It is an important metric as it costs less to keep existing customers than it does to acquire new ones. Building trust between a brand and its customers helps your company keep existing customers.
How to Increase Your Customer Lifetime Value:
1. Improve the Onboarding Process
A reason why previous clients decided not to return to your business could be due to you having a poor onboarding process. This is where your client begins to engage with your products or services and starts to be impacted by their experience. Your onboarding process should be fast and easy to encourage new users to come back for more. Some ways to simplify your company’s onboarding process is to have walkthrough guides, interactive videos, tutorials, and other content that will help clients fulfill their goals.
2. Personalize the Experience
A great way to cultivate customer loyalty is by adding a personal touch to some of the things you do. It could vary from a hand-written thank you note to addressing emails on a first-name basis. While this typically works better for smaller companies, for a larger company personal recommendations on a client’s account impacts the consumer to purchase more from your large company.
3. Perfect Customer Service
Customer service is a massive part of customer lifetime value. Your customer service is important regarding existing customers. It is where you will continue to interact with your clients. Ensure reliable, polite, and good customer service to not only contact at the point of purchase but also to encourage repeat business when a customer contacts your brand.
4. Recruit Your Customers
A great way to increase customer lifetime value is by allowing your customers to get involved. This is where a referral program will come in. Referral programs are a great way to increase customer lifetime value. This is a way where customers can use their past experiences to convince others at your job. There are multiple benefits to having a referral program. First, the effort to acquire new customers is reduced which reduces the CLV overall. It will also encourage existing customers to continue to frequent your brand.
Customer lifetime value is an important metric that delivers sustainable business growth between recurring customers. For a business to correctly implement CLV, they should think long-term and assign a specific CLV strategy to each specific customer.