All good businesses know that the only thing better than gaining new customers is keeping the ones they already have.
Unfortunately, a recent survey has found that over half of merchants have seen lower margins this year, mainly due to higher supply chain costs. The best way to increase these margins in the future is to increase Customer Lifetime Value (CLV) by enhancing the experience for their current customers.
What Is Customer Lifetime Value?
CLV is simple. It measures a customer's average spending during their time with you and calculates how each customer influences your revenue. For example, you might have many customers, each providing little value, or fewer customers, each offering more significant value.
Understanding CLV more can help you discover how to increase your average order volume per customer, how many purchases they make, and the volume of customers making purchases.
Using the CLV calculation shows how much value each customer brings to your business and whether you are losing customers faster than they can provide value.
Here’s the Customer Lifetime Value formula to use:
Customer lifetime value = customer value x average customer lifespan
Note: Customer value = average purchase value x average number of purchases
Here are the five ways you can increase CLV for your business:
You can no doubt make your customers want to return for more by using your third-party logistics provider (3PL) to find the best shipping routes. This ensures your goods get to your customers faster and for a fraction of the cost.
Research has found that fast and free shipping is more effective than discounts or free gifts in getting customers to purchase. You’re also more likely to lose repeat purchases with logistical hiccups like delayed shipping by 87%.
At Portless, providing superior delivery experiences for your customers is our most important goal. Our partners, Byteex, have seen a massive difference regarding brands delivering cheaper and faster shipping and increasing customer lifetime value.
Customers are more likely to keep returning for more if they know they’re getting something out of it. This includes loyalty programs that offer discounts after you make a certain number of purchases or even free gifts.
Customers who are members of a loyalty program are 59% more likely to choose a brand over a competitor and 43% more likely to buy weekly. So, consider introducing a loyalty scheme or some form of incentive into your business.
Quality customer service is incredibly important among shoppers, and it is something that all e-commerce businesses should offer. If a customer has a question or concern, make sure it’s easy for them to contact you via contact forms, live chat, email, or even social media. Have all these aspects available on a user-friendly ‘contact us’ page.
It’s been found that 72% of shoppers are willing to spend with brands that provide excellent support, and one-third of consumers are likely to switch brands after a single instance of poor customer service.
Simple ways to promote better customer support can include:
Providing 24/7 Support
Customers want to get help with their questions and requests immediately. The best way to do this is by offering 24/7 support, where you can respond as quickly as possible.
Offering Live Chat Support
Around 80% of business buyers want companies to respond and interact with them in real time. The best way to do this is by offering live chat support. 79% of customers say they prefer live chat over other options due to its immediate responses.
Having Self-Service Content/Infrastructure
Around 91% of consumers would rather use a Knowledge Base, like frequently asked questions, if available, and 70% prefer using a company’s website to solve their problems instead of email or phone support. With that in mind, a knowledge base should be part of your support infrastructure.
Attracting customers and increasing sales are crucial for an e-commerce or DTC business. However, to truly maximize customer lifetime value (CLV), upselling and cross-selling are key.
The best cross-selling and upselling results come from the following pages:
Checkout pages
It’s always a good idea to offer recommended purchases before customers buy their cart products.
Order confirmation emails
You can also promote other products in your order confirmation emails, as long as they do not take up more than 20% of the transactional email (under the CAN-SPAM act).
Subscription renewal reminder emails
If someone has a good experience with you, subscription renewal reminders and milestone emails will remind users about the value your company is providing them.
Customers relate much better with businesses that offer a personal experience. In fact, 71% of consumers expect personalization when they connect with a brand. And 78% of consumers are more likely to purchase repeatedly from companies that personalize their marketing communications and buying experiences.
But why is it important? Personalization involves making the customers feel special and valued when engaging with a brand. When you add that personal touch, you deepen customer engagement and foster stronger emotional connections.
Here are some ways you can personalize your customer experiences:
Website Personalization
Byteex mentions that In 2024, website personalization is crucial for businesses. By tailoring the online experience to each individual, companies can significantly enhance customer engagement and loyalty. Implementing website personalization allows for a more engaging and tailored online experience, leading to increased customer satisfaction and improved CLV.
AI plays a significant role in achieving effective website personalization, and that’s where Byteex stands out from the rest.
Tailor-Made Product Suggestions
When marketers keep accurate records of past purchases, they can make product recommendations based on customers' wants and needs.
Personalized Communication Strategies
Email personalization makes a customer feel like you’re talking directly to them. This includes mentioning their name, referencing their job/location, and providing targeted recommendations.
Businesses that evaluate and understand their Customer Lifetime Value gain a strategic advantage in predicting revenue growth and allocating marketing resources effectively for maximum results.
At Portless and Byteex, we are committed to aiding our partners with increasing your Customer Lifetime Value. From optimized shipping costs and speed to cross-selling and upselling, we’ve got you covered. Contact us today.
