Strategies to increase customer lifetime value. There are three key strategies your business can use to increase customer lifetime value (CLV). If you don’t pursue one or more of these strategies, it’s unlikely that you’ll see a big uptick in customer retention or customer loyalty toward your brand anytime soon. Increase sales over time: The second strategy to boost CLV is to increase the number of sales your business closes over time. To increase sales over time and build customer lifetime value, you must communicate with your customers on an ongoing basis. Personalized content and offers are critical to building customer lifetime value. Furthermore, make sure it’s extremely easy for customers to make repeat purchases from your business. Even though customers have purchased products or services from your business in the past and may have been satisfied with those experiences, you can’t cut corners on future communications or transactions. Remember, user experience is critical to building customer loyalty and increasing retention and CLV. Both are tactics to increase sales from new and prior customers.
It’s far less expensive for a business to retain customers than it is to acquire new ones, yet most companies continue to invest significantly more money into customer acquisition than retention. As a result, they do acquire new customers, but they lose a lot along the way.
Keep this in mind as you plan your next marketing budget. It just might make sense to shift some of your marketing investments into retention initiatives and away from acquisition initiatives. First, you need to develop strategies and specific tactics to make those strategies drive positive results for your business.
Strategies to increase customer lifetime value.
There are three key strategies your business can use to increase customer lifetime value (CLV). If you don’t pursue one or more of these strategies, it’s unlikely that you’ll see a big uptick in customer retention or customer loyalty toward your brand anytime soon. Let’s take a closer look at each:
Increase sales per order: The first strategy to increase customer lifetime value is to increase sales per order. Your goal is to motivate customers to spend more money on every transaction.
Increase sales over time: The second strategy to boost CLV is to increase the number of sales your business closes over time. While the first strategy focuses on the value of each individual transaction, this strategy focuses on the quantity of transactions.
Reduce costs to serve customers: The third strategy to increase CLV is to reduce your business’ costs to serve customers overall. This includes all costs from packaging products for shipping to answering customer service calls. The lower your costs to serve customers are, the greater the value of each customer to your bottom line.
Tactics to implement your strategies.
Once you have your strategies to increase customer lifetime value, you need to identify the tactics to implement those strategies. How will you turn your strategies into action?
Fortunately, there are many options available to you. Any steps you take to improve the customer experience should improve CLV. Here are five tactics to help get you started:
1. Communication.
To increase sales over time and build customer lifetime value, you must communicate with your customers on an ongoing basis. The secret to building a powerful brand is developing a relationship with customers that leads to brand loyalty and brand advocacy over time. That starts with consistently delivering on your brand promise, meeting customer expectations for your brand, and communicating with them to build brand trust.
Email marketing is an excellent tool for communication that leads to increased CLV. Send campaigns on customers’…
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