Knowing your business’s Customer Lifetime Value, or CLV can benefit your business tremendously. While you might be able to attract customers to your business, retaining them and knowing what revenue they bring to your company is equally important.
Studies show that it costs five times as much to attract a new customer than to keep an existing one. Therefore, improving your CLV can help you save a lot of resources.
But what exactly is CLV?
Well, CLV is the revenue a customer brings to your business throughout the time they are associated with you.
Let us assume that you are a live-streaming platform for a healthcare company and that you charge 13$ per customer per month. Now, if a customer, on average, stays with you for two years, you generate a revenue of $156. This is the CLV of your customer.
How does knowing your CLV help you? Well, you can understand which customers you should focus on more, how much you can grow your business, how much you should spend on acquiring a new customer, what services to focus more on, etc.
It is a lot of effort initially and requires you to dedicate a fair bit of time to thinking about helping your customers and ensuring they stay with you.
However, you can reduce the time spent on redundant tasks and focus more on customers by automating your sales force. This will help you spend distraction-free time on the sales and marketing part of the business.
The next question is how do you boost your CLV? Well, the most important one to start off with
is to invest in good CRM software. A CRM can help you gain insights about your customers through real-time reporting, automated engagement, interaction management, etc.
Here are some more ways to improve CLV –
1. Introduce New Discounts and Reward Systems
One of the easiest ways to improve your CLV is to reward your customers who have been loyal to you for many years. Keep them happy to keep them longer!
These rewards can be in the form of providing discounts on renewals, special product accesses, etc.
2. Ask your customers for referrals and testaments
Referral programs are an excellent approach to boosting the lifetime value of your customers. Customers who are referred have a 16% greater lifetime value and 18% lower turnover (also known as customer churn). In addition, 81% of customers trust suggestions from people they know, and 55% discuss their new purchases on social media.
3. Listen to your customers’ problems
Taking feedback and time to listen to all your customers’ problems can really help improve CLV. Taking constant feedback and tailoring your products to suit their requirements will keep your customers happy and feel that they are being heard.
4. Improve your customer service
If you want to establish stronger customer connections, the type that inspires clients to return to you, again and again, you must provide exceptional customer service. And If a consumer has a problem or a complaint, it is your job to respond and make amends in whatever way you can. If they require information or support, give it to them as soon as possible. A terrible customer care encounter might cause a once-loyal consumer to never deal with you again.
5. Targeted campaigns and humanitarian campaigns
Email marketing is the most successful digital marketing approach for client retention, according to 56% of digital marketers. You may send relevant campaigns basis the requirements of your customers. Don’t forget to secure your email domain with DMARC to enhance its credibility and boost the open rate.
Another excellent technique to boost your CLV is to demonstrate the compassion that drives your business.
People want to feel good about where their money is going. Through graphics and information in product inserts, emails, and social media, focusing on humanitarian activities can help impress your customer. What’s more, they will feel more inclined to buy your product as it is helping the rest of the world as well. Sharing images of our farmers, for example, can help your consumers feel they are doing more than just buying your product.
6. Making customer-centric content
Another way to keep customers close and satisfied is to provide content they want to see, and not what your business wants to put out. Do your customers want more advice on managing their sales pipeline? Are there any current trends in the market that they want? Are they looking at APIs that can integrate with your product? By creating customer-centric content, you not only keep existing customers happy but also attract new customers.
In the end, each business has its unique customers. You will have to spend time researching the best ways to improve the consumers’ lifetime values. These are just some necessary steps to give you immediate effects and buy you time until you can create a better-suited plan for your business.