Businesses can grow using two methods: one is to gain new customers. The other is to concentrate on existing ones and increasing their customer lifetime value (CLV). Research indicates that the second method is more effective in generating a predictable and steady rise in sales. However, 44% of firms spend money and time on getting new consumers, and only 16% try to reduce churn. The longer you maintain relationships with a consumer the more is their lifetime customer value.
What is Customer Lifetime Value?
CLV metrics indicate how much profit your firm can gain from a single consumer over their time with you. Therefore, a high customer lifetime value means you can get more revenue from them. This makes each client more valuable so you should make efforts to retain them as long as possible.
For example, let’s consider a SaaS product with monthly subscription plans. If their package costs $100/month and a client stays with them for two years, the lifetime value of the customer is $2,400. This figure rises the longer the subscriber stays with the vendor enabling them to increase revenue from their existing clients.
How to Boost Lifetime Customer Value
You can increase the lifetime value of a customer in multiple ways ranging from improving your support process to changing your billing cycle to yearly from monthly.
In this article, we provide you effective ways to gain more sales over the customer lifetime.
Enhance the On-boarding Process: An efficient on-boarding procedure is important to welcome your new customers in the right manner. It is also vital because poor on-boarding can lead to churn according to a report. Your customer interacts with your offering at this stage so you can have a positive impact on them. Plus, it will encourage them to return for more which helps to boost CLV metrics.
The on-boarding process can vary according to customer needs, desired outcomes, and the industry. You can simplify the procedure with resources such as wrapped tutorials, how-to videos, walk through guides, etc. that can help your clients make good use of your product. Further, it is important to personalize the on-boarding workflow according to the customer persona. Concentrate on communicating your offering’s value from the beginning.
Deliver Value-Loaded Content: Email marketing is an effective method to retain consumers, but many marketers use it wrongly. Instead of sending relevant and value-packed emails, they implement automated drip programs that deliver generic email blasts. Your service or product offers value to your buyers. To increase customer lifetime and revenue, you should communicate this value clearly to your consumers in your messages.
Another method is to offer educational content that is based on personalized knowledge sharing. Personalization is important and you need to refrain from sales pitches. Consider specific customer requirements and recommend ways to resolve their issues utilizing your product or service.
Provide Top-Notch Customer Support: It is vital to offer quality customer support to boost customer satisfaction and loyalty. If your support is not up to the mark, consumers will move to your competitors even if they like your product. Research shows that 33% of customers will switch companies if they experience bad customer service even just once.
To improve the quality of your support services and lifetime customer value you should try to deliver omnichannel assistance 24/7. In the US, 66% of consumers utilize at least three communication channels to reach support. Identify the popular channels favored by your customers apart from phone and email, and train your agents well on using them effectively.
Develop Close Relationships: Weak relationships can lead to customer churn, therefore it is vital for your business to maintain good relationships with your buyers. You can nurture a robust bond with them by listening to their needs and demands, and fulfilling them. This will increase their appreciation for your brand as they’ll realize your team is professional and proactive.
Learn about your audience and their expectations and feelings. Survey your customers to get actionable insights into their requirements and deliver your promises. This will also help you to identify any drawback in your product or service, and rectify it immediately to restore customer satisfaction and happiness.
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