What is the value of a customer to you? This number can be predicted and you will know how much it costs to retain customers.
CLTV (customer lifetime value) is one of the most important metrics that a company has to make smart decisions.
Also, you can see how much cash your business will earn if your CLTV benchmark is raised by X percent. You can expect more growth if you have a greater influence on this number.
Finding the philosopher's Stone of Marketing is about optimizing your CLTV. Your business will be immortalized if you turn lead into gold, cure sickness, and make it more profitable in the long-term.
- To reap recurring income, build long-lasting relationships.
- Your customers should feel heard.
- Cross-selling and loyalty programs can increase return sales.
- Great customer service training is worth the investment.
What is CLTV?
A simple measure like investment return won't suffice when you are evaluating the growth of your company. This is where you want to see recurring revenues. It's what will keep your business running over the long-term. It is crucial that you have loyal customers who will support you over a long period of time to see recurring revenue. This is also known as customer lifetime value.
First, let's look at these three factors to help you understand how to increase your customer lifetime value.
- Average transaction value
- Number of repeat sales
- Average Customer Retention Time
Add these three factors together to get your CLTV. Here's the TLDR. Any one of these metrics can increase your CLTV. Maximizing the lifetime value of every customer boils down to this:
- Encourage more transactions per sale or cross-selling
- Increased frequency of transactions
- Customers are encouraged to buy more meat.
- Keep them in your business relationship for longer
This last strategy is the best way to increase customer lifetime value. While you can cross-sell and up-sell as much as you like, focusing solely on customer retention strategy can bring you sustainable benefits to your CLTV.
Why? You can build long-lasting relationships with your customers by creating effective strategies to increase customer loyalty. Customers will stay loyal to your brand because it is what they love. They will willingly be a voice for your brand.
This allows for greater profits over the long-term without needing to be aggressive in sales with every business transaction. Customers who are loyal to your company will be more likely to return the favor by building stronger relationships with them and allowing you to acquire new customers.
In Golden Circle Secrets, Ben Midgley and Dale write that “Do what makes people happy and they will continue buying from you” and will refer others who will buy from them.
Pushing sales too hard can lead to a negative outcome. If you push your buyers beyond their threshold, they will turn their attention to keeping their money instead of searching for the products and services they want.
You need to combine all the factors in a way that is relevant to your brand and industry to maximize your CLTV. These are the top methods you can use to get more from your customers without making them feel uncomfortable.
How to Increase Your CLTV: The Best Methods
1. Better Communications
How can you make someone special in a relationship? Listen to them. Marketing is a different way of referring to listening. However, it's still the same concept.
You can improve your listening skills and communication by segmenting and researching buyer personas. Feedback channels, customer analysis, and market research can help you learn more about your customers.
Image Source: Digital School of Marketing
Your buyer profiles can be improved. Using marketing automation software, you can then determine your buyer intent so that you can send targeted communications to your buyers that make them feel heard.
2. Do it all
It's easy to nurture your customers by going above and beyond to make them happy. It is amazing how reaching out can make a difference in a relationship.
A personal thank-you message is a great way to show your appreciation. Send a personalized thank you message or gift that is based on the customer's preferences. Use your creativity. If you have a higher CLTV, it is worth investing in something unique to impress customers.
3. Inspire Loyalty
Businesses are increasingly using loyalty programs to increase CLTV. Oracle reports that 73% of U.S. adults will be enrolled in at least one loyalty program by 2021.
These are a few'must-haves” if you want to improve your existing loyalty program or start one.
- It should be easy to join and easy to understand
- Members can quickly accumulate points
- Provide relevant rewards
- Encourage engagement
Loyalty programs can also help you identify your most valuable customers. A great loyalty program will make these customers more likely to refer your business to others. This rewards customers who stay with the company for longer periods of time by offering them something in return.
4. Drive Value: Cross-Selling, Up-Selling
You can expect to be asked whether you would like something to go with your morning cup of coffee when you enter your favorite coffee shop. It's part and parcel of the routine between you, your barista. It's also a good thing. It's a good thing, too.
These add-ons are great for pairing wine and cheese, shoes with socks, or warm croissants with coffee. They also add value to the customer's experience. Just mention that cross-selling will increase the value of your customer's experience.
It is worth the effort when upselling. Put yourself in the shoes and thoughts of your customers. Consider “what's in the deal for me?” Here are a few examples of enticing deals if you have trouble coming up with one.
- 30% off when you buy 2 items
- Sign up for a yearlong subscription to receive a special discount
- Waived fees
You can maximize your CLTV by increasing the average transaction value. You can earn customer loyalty points by making it worth their while.
5. Keep your online presence current
Right? These are not the right words for your business. Your brand's relevance will make you more memorable to your customers when they are considering buying. It's super easy to increase your repeat sales by being consistent online.
Consistently publishing content on your website, and being active on social media will remind your customers that you are there when they need you.
6. Get better customer service
Forbes recently published a survey that found businesses lose upwards of $75 Billion each year due to poor customer service.
Each person who interacts directly with customers must be a liaison between your company and them. Programs like Yelp and Google Reviews can be a great help. You can improve your customer experience by giving them the chance to give feedback.
To ensure the highest standards of customer service, take a proactive approach in training and guiding your sales staff. Your team should be empowered to go the extra mile for customers who are loyal.
Sometimes, the best way to wow customers is to just be yourself and not have to ask permission from another department.
How to perfect your CLTV Formula
These methods will allow you to increase your customer lifetime value and ensure long-term business growth. You can get the most from your CLTV optimization efforts by trying a variety of methods. Then measure their impact to determine your best tactics.
Your overall strategy will depend on your personal preferences. Continue to experiment with different options until you find the perfect CLTV strategy.
Perhaps your brand is most successful if you focus on transaction value. While some businesses might see the greatest return from investing in customer service, others may be more able to benefit from personalized communication and segmentation.
To increase CLTV, the easiest thing you can immediately do is to start publishing content. You can increase CLTV by publishing consistent content! Weekly content converts users to paying customers, which will increase the weekly sales numbers we keep talking about.
Contact us if you are stuck. You can also check out our SEO Blog Writing Services.
Marketing Insider Group's post 6 Powerful Strategies to Maximize Customer Value (CLTV), appeared first.
By: Kelsie Feeney
Title: 6 Powerful Methods to Maximize Customer Lifetime Value (CLTV)
Sourced From: marketinginsidergroup.com/content-marketing/6-powerful-methods-maximize-customer-lifetime-value-cltv/
Published Date: Wed, 01 Jun 2022 16:00:00 +0000