We live in a data-driven age where marketers can track almost everything from emails and social media to website visits and sales. This data provides valuable information about customers. It gives detailed insights into the individual touchpoints of the customer journey from start to finish. In addition, it is possible to measure the total value of individual customers, the so-called Customer Lifetime Value (CLV). It describes the total value that a customer brings to the retailer during the entire business relationship with the company.
CLV is a long-term indicator of a company’s health, as it allows you to assess the value of not just a single marketing campaign, but your entire marketing mix. Only by building loyalty and being remembered across multiple touchpoints can you ensure that these relationships remain healthy.
How do you increase CLV?
I think good customer service is paramount. The basic requirements for this include simple ordering channels and fast delivery, uncomplicated return options, various payment options, discount campaigns, easy check-out, competent sales staff, and an inviting store design. But what else can you do to keep customers loyal to your company for as long as possible?
Cross-selling and upselling strategies
By creating and storing customer profiles, including preferred sizes and styles, your team members can access this information to sell the right products to customers. Successful cross-selling and up-selling demonstrates a deep understanding of customer preferences and desires, fosters a sense of personalized care and strengthens the bond between customer and brand. The more consumers engage with a brand, the more likely it is that they will be interested in other products or services, further increasing the lifetime value for your company.
Customer loyalty programs
One of the most effective ways to increase CLV is to offer a loyalty program. Loyalty programs increase purchase volume by motivating members to participate and getting them to reach certain thresholds to unlock further incentives. These incentives include, for example, collecting points for every purchase. These can be exchanged for discounts or free products. Loyalty programs offer further benefits by participating in surveys about potential new items or submitting product reviews for products, the website, or the app.
Referral programs
Referral programs leverage the engagement of existing customers to attract new ones. By incentivizing referrals in the form of benefits, retailers allow their satisfied customers to actively promote the brand in their social circles. Seamless integration of the referral program across multiple touchpoints, including websites, mobile applications, and social media, ensures accessibility and convenience for your customers.
Create a community
Consumers are increasingly buying products that correspond to their values and lifestyles. They prefer to be inspired to buy products by people rather than by brand messages. Consumer communities can help to build a lasting emotional bond between brands and customers. Emotions have a significant influence on purchasing decisions. Customers will likely spend more on your brand if they feel emotionally prompted to do so.
Mobile app only
If you manage to convince your customers to download your mobile app, you can retain their loyalty by offering benefits that only apply to mobile devices. For example, offer app users free shipping on all orders. This is an important incentive to shop via the app. Another advantage is exclusive content such as videos with celebrities or influencers, or surveys in which customers can express their opinion on future products.
Improving the average customer lifetime is crucial for retailers because it ensures a higher average order value, more profitability, and loyal customers. To achieve this goal, it’s not enough to plug numbers into the customer lifetime value formula. If you want to appeal to potential customers and win them over in the long term, you need to look at the relationship beyond the purchase and consider the deeper desires of the consumer. This is the only way to turn one-time buyers into regular customers.