5 Ways To Increase Customer Lifetime Value For Your Online Business
Customer Lifetime Value (CLTV) tells you the predicted revenue a customer will generate throughout their entire relationship with your business. It is an incredibly valuable metric that allows you to see how valuable customers are going to be. It even takes the guessing out of SEM, PPC, retargeting campaigns, and spending on customer retention.
The longer a business can keep a customer, the greater their customer lifetime value becomes. So, having a high CLTV means each customer you gain generates more revenue for your business.
The following are 5 effective ways to increase customer lifetime value and your profits.
A subscription model helps with determining the lifetime value of a customer and what your turnover rate of customers typically looks like. An annual billing cycle is an easy way to produce a higher CLTV by committing customers to a year of usage. It also provides your business with a full year of revenue up front. A great way to encourage customers to commit to an annual subscription is by offering a significant discount (typically between 10-20% off).
Email marketing is one of the most effective ways to stay in touch and retain customers. When it is done correctly, it can even lead to an increase in sales and conversions. The key to effective email marketing is not sending repetitive sales emails that promote new products without offering any value. Each email should provide real value for your customers and remind them how your product or service has helped them.
Quality Customer Service
9 out of 10 consumers say they’re willing to pay more to ensure a good customer experience and as much as 70% will continue to do business when a complaint is resolved. Keeping current customers costs considerably less than acquiring new ones, and poor customer service can destroy your average customer lifetime value.
Upselling and Cross-selling
Cross-selling and upselling are similar in that they both offer customers more value than what they would have received if they had only bought the initial product they searched for. But, when implementing an upselling or cross-selling strategy, you always need to keep the consumer in mind. The object is to make their visit more valuable, not just push products on them. You want to focus on making them a recurring customer by enhancing their experience.
Monitoring and using feedback will give you the chance to intercept a problem and fix it before you lose a customer. This provides a rare opportunity to open up a dialogue with your customers and a chance to develop rapport. It will also give you insight into what your business is doing well, what areas could be improved, and how your customers really feel about the product or service you deliver.
Increasing CLTV is essential to get a real understanding of how valuable your customers actually are to your business. It also allows you to focus on creating an effective strategy for producing a steady, predictable increase in revenue. Furthermore, it helps your business make decisions that drive long-term success.
If you focus on customers’ needs and delivering consistent value, your business will have no problem keeping customers around. But, if you are looking for assistance when it comes to increasing customer lifetime value, BMT Micro may be a solution for you. We have a highly trained customer service department that is quick to respond to customers’ and vendors’ inquiries. We also have all the tools you need to run a successful subscription program and more! BMT Micro, Inc. has every base covered when it comes to successfully selling your product online. If you would like to learn more about our services or if you have questions, please feel free to contact our vendor services via email at email@example.com or visit our website at www.bmtmicro.com.