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The Team at CallMiner
July 06, 2022
It’s easier (and more cost-effective) to retain existing customers than to acquire new ones –5 to 25 times cheaper, in fact. But you want to get the most from your long-term customer relationships, which means cultivating customer loyalty and increasing customer lifetime value (CLV). Doing so requires a commitment to customer satisfaction, providing an exceptional customer journey experience at every touchpoint throughout the buyer’s journey.
So, how do you improve the customer experience and convince your customers not only to remain loyal but also to increase their purchases or spend with your company? To learn more about the top strategies and tactics today’s successful businesses are implementing to increase customer lifetime value, we reached out to a panel of marketing professionals and business leaders and asked them to answer this question:
“What's the best way to increase customer lifetime value?”
As Senior Vice President of Client Insights, Josie Gaeckle leads a team that serves multi-unit retail brands—helping define and implement strategic business goals that enhance the customer experience. Since joining SMG in 2006, Josie has developed programs and delivered insights for some of SMG’s largest clients.
“An enterprise experience management (XM) program helps brands measure, interpret, and act on key metrics that increase customer lifetime value (CLV)…”
A comprehensive XM program measures touchpoints across the customer journey to help brands identify key friction points, how they link to key performance indicators, and what changes need to be made to increase CLV. At SMG we believe CLV is one of the top outcome metrics brands can use to demonstrate the financial benefit of an XM program.
Here are three ways to increase customer lifetime value:
Increase customer visit frequency: For one of our grocery clients, we proved that a highly satisfied customer returns one day sooner. Customers who return one day sooner make more trips each year, which results in highly satisfied customers having a higher CLV. Knowing this, the grocery client could focus on the key drivers of satisfaction to increase visit frequency and improve CLV.
Increase average spend: Focusing on the specific customer interactions that can drive increased average spend will improve CLV. By measuring the customer experience and linking to transaction data, you can identify what behaviors and offerings (e.g. staff providing product recommendations, custom fittings, etc.) drive increased average spend per visit and focus on improving these offerings to increase CLV.
Increase customer longevity:
Roger Huang is the Head of Growth Operations for Springboard.
“First things first, you need a way to quantify customer lifetime value if you want to increase it…”
Our CLV calculation involves taking the average of a customer's past and future revenue, discounted by the customer's Churn Rate. You can use this calculation to measure how much you're investing in marketing and sales efforts and to make sure you are getting a good return on investment (ROI).
Once you have that number, you need to make good use of customer segmentation data so that you know exactly what each customer group wants and expects in terms of content marketing, product and service features, and customer service attention.
Kavin Patel is the Founder and CEO of Convrrt.
As a CEO, I would assert that when a product appears necessary, customers are more likely to act. Consider the following scenario: you own a technology eCommerce website, and one of your clients recently purchased a smartphone. You might give them a fantastic protective cover or another relevant item. By offering a tiny discount for bundling, you can turn it into a good deal. The majority of large eCommerce firms, such as Amazon, employ this approach of upselling to maximize revenue from each individual sale.
Marc Stitt is the Chief Marketing Officer (CMO) of FMX.
“The first step in developing any plan or strategy is to go back to the basics…”
Identifying and resolving the target audience’s problems. What is it about us that sets us apart from our competitors? As a tech, marketing, and data guy, I'd start with our own data, such as first-party customer data, CRM, and buying patterns.
It's time to put the plan into action! Once again, the focus is on figuring out when those mysterious single moments of truth arise, during which our brand has the opportunity to really shine and assist our customer in completing his task. Making a list of the ways in which we can bring value to her or his life. This fundamental analysis is at the heart of every tactic and every action. Because the key to developing brand CLV whales, creating customers that support you, is to understand when and how you help them improve.
Hanah Alexander is the Editor-in-Chief of TodayTesting.com.
“One of the best ways to increase customer lifetime value is to start early with customer onboarding…”
Onboarding is important for increasing customer lifetime value because it helps customers become familiar with your product and how to use it. Without a good onboarding process, you're going to lose customers early on because they’ll feel lost and confused by your product.
Onboarding can also help you collect data about your customers so that you can continue to personalize their experience and increase their loyalty to your product. This is crucial because we are in the end times with respect to third-party consumer data. So first-party data, the data you collect from customers and potential clients, is more important than ever.
By providing a great onboarding experience, you can create customers who are more likely to stick around and be more valuable to your business in the long run.
How can you improve your customer onboarding process? One way is to make sure that your onboarding process is easy to use and understand. If it's confusing or difficult to use, customers will be more likely to give up and not bother trying to learn how to use your product. You can also make sure that your onboarding process is tailored to your customer's needs. If you can personalize the experience and make it relevant to them, they will be more likely to stick with it.
Finally, you can also track how well your onboarding process is working. This way, you can continue to improve it and make sure that your customers are getting the most out of it.
Steve Pogson is the Founder & E-commerce Strategy Lead at FirstPier.
“Stay in touch through email marketing…”
Customers will not return to your business if they do not recognize you. It's critical to communicate with your consumer base in order to maintain your brand front of mind. Email marketing is a powerful tool for keeping in touch with clients for internet businesses.
A monthly newsletter, for example, might go a long way toward building a relationship with your clients. Regular email interactions allow you to stay in touch with customers and deliver value outside of the context of the purchase. When done correctly, email marketing can generate a significant return on investment, driving sales and increasing order value over time.
David is the Managing Partner of inBeat.
“You need to have a perfect triangle…”
One side: speaks to the customer emotionally (needs, desires, tensions, resolutions, etc.).
Second side: speaks to the intellect of the customer (justifying the business relationship).
Third side: speaks to the instinctive part of the customer (survival, keeping up with the Jones', the more basic aspects, etc.).
The more sides activated means the bigger net you will cast.
Tyler Martin is the Founder of ThinkTyler and a Certified Business Coach and Consultant.
Making your products epic is the best way to stay ahead of the competition and increase client lifetime value. Without a doubt, making your brand synonymous with excellence is critical. Being a reputable source of merchandise can create a fan frenzy that skyrockets your revenue. Take, for example, Apple's fanaticism. Because of Apple's devotion to excellence, millions of people queue when new items are announced.
David Bitton is the Co-Founder and CMO at DoorLoop.
“Offering additional services or add-on items to the client's existing solution is an excellent approach to boost customer lifetime value…”
By providing relevant services that improve the effectiveness of the product they're already using, you're providing more value to the customer, reducing their tendency to seek a solution elsewhere, and increasing their loyalty to your brand. It ultimately comes down to giving the most value to your customers. Bundling complementary products together, offering limited upgrades, or offering free shipping with a minimum spend are all examples of value-driven add-ons to consider.
Another strategy to boost customer lifetime value is to provide omnichannel customer assistance. To achieve client expectations in today's digital world, you must be visible on as many platforms as possible. Examine all of the channels that your clients prefer and train your support team on how to use them effectively.
Philip Akhzar is Founder of Arka.
“The best way to increase customer lifetime value is to foster a sense of community across one’s brand…”
A community supports the individuals that make it up and helps everyone pursue a common goal. Through customer loyalty programs, free upgrades or perks, and unparalleled customer
service, every member of the customer community will feel valued and appreciated. Going a step further and setting up a referral program for new members is another great way to attract new members to the community and to increase customer lifetime value.
Adam Rossi is the CEO of TotalShield.
“One way to boost customer lifetime value is to foster a sense of community…”
People want to buy from brands that are personable and humanized—not faceless service brands. Onboard your customers in a space that allows them to engage with like-minded people or businesses. Once they've taken part in that community, they'll be intertwined with your products and services and their connection will be woven into the group that they're now part of. This will improve customer loyalty to your brand.
Andre Kazimierski is the CEO of Improovy.
“To best increase customer lifetime value, you must constantly work to keep your customers happy and engaged with your product…”
Email marketing strategies are a great way to consistently engage with your customers, but web design and development also plays a key role in retaining customers as well. Additionally, keep your customers happy with free upgrades!
Jason Sherman is the founder and CEO of TapRm.
“Maintaining a high repeat purchase rate is crucial as loyal customers are a steady source of revenue…”
Promoting a variety of exclusive limited-time deals and discounts on your social media channels can attract new members to your loyalty program. While incentives such as coupons and free shipping are always tempting, diversifying your rewards will enable your program to appeal to a broader audience as some offers will resonate more with one type of customer than the other. And be sure to make the rewards attainable in a relatively short amount of time. If it takes too long for customers to achieve the goal, they may lose interest and drop out of your program altogether.
Eran Galperin is the founder and CEO of Gymdesk.
“Customer experience is king…”
If you think about it, customer experience includes every touchpoint, from the moment they click
through to your site, to your after-sales service. To offer an exceptional customer experience, start by ensuring a really smooth onboarding process. You don't want glitches from the start. Offer omnichannel support and make it 24/7. These days, that's pretty easy to achieve with chatbots. Keep an updated knowledge base on your website to offer customers a quick solution in a tutorial or video. And, of course, build relationships. Personalized service is sought-after and people will remember if you make them feel cared for.
Aseem is the CEO of Help Desk Geek.
“Make your customers feel special…”
If a portion of your clients are regularly and freely engaging with your brand, they are the perfect people to provide the whole experience. Send them something new from your product range if you have one. Give them the upgrade for free if you have a premium service. The expense to you is insignificant when compared to the impact those consumers will have on their friends, family, coworkers, and social media followers. You can also launch a loyalty program for your fan base!
Care about their feelings!
Social and cultural topics aren't only discussed at lunches or over drinks at the bar. They have an impact on all of us, including your customers, on a daily basis. Incorporating social and cultural topics into your blog posts and social media content will assist you in attracting a loyal following of customers who share your viewpoints. These clients will then attract more people who share their interests.
A fair warning: Sincerity is essential for this to function. Customers today are skeptical of anything that appears to be phony or bogus.
Drake Pusey is the founder of Volition Project.
“There is one single strategic transformation that unlocks all the various ways to incrementally increase customer lifetime value…”
Designing customer experiences as cycles. Many companies think and design in terms of transactions: linear customer experiences where the goal is to get the customer from one end to the other. But lifetime value is built on a lasting relationship, and lasting relationships depend on customer experiences that loop back.
For a customer, every new interaction with a brand carries baggage from the last time. Organizations need to design their customer experiences as cycles, where each repetition builds on the last, and loyalty is rewarded. To accomplish this, each iteration needs to be measured and understood, so the next iteration has context to build on. Just as you would never wash your hands of a good friend, a brand’s customer experiences should never be built to end.
Dan Cassidy is the CEO/Founder of Brandhopper Digital.
“Customer lifetime value is a function of average order value (AOV) and repeat purchase rate…”
So tweaking either of these variables can lead to an increase in LTV. We’ve found the best way to do this for our eCommerce clients is to give customers a reason to buy time and time again, whether that’s through cross-selling new products or up-selling multiple orders via a subscription. Doing either or both of these is a great way to increase customer lifetime value, which can lead to an increase in profit and allow for faster growth for any business.
Chris is the CEO & Founder of Legiit.
“Email marketing is an easy way to improve your customer lifetime value because it keeps your business top-of-mind among your customers…”
There is a fine line between sending the email being on the customer's radar, and annoying the customer—so beware! For the freelancing industry, people are generally interested in improving their business or becoming involved, and as such, a weekly email is suitable and often asked for.
The customer lifetime value won't increase if you simply send out emails; the main idea is to encourage engagement. It should be an opportunity for your customers to receive an exclusive discount, see an update from your overall social media presence, etc. The average person’s attention span has shortened to approximately 2 seconds—your email has to be effective in those 2 seconds!
Nathan Hughes is the Digital Marketing and SEO manager at DiggityMarketing.com.
“For a high customer lifetime value, your customers need to keep coming back to your product…”
One way is to keep reminding them that your products or services are efficient on a large scale. Let your customers know how much you have contributed to solving problems similar to theirs. You can send this information to your customers through monthly emails. For example, at our marketing firm, we let our customers know about the number of websites we have helped with SEO management.
Paige Arnof-Fenn is the founder & CEO of global marketing and branding firm Mavens & Moguls.
“Prioritizing retention over acquisition is critical…”
It’s a lot more efficient to keep existing customers and clients happy than it is to keep filling the pipeline with new ones. You’ll save a lot of time and money if they just keep coming back for more. The stickier they are, the more they’ll contribute to your bottom line. Having long term relationships allows you to make more money over the long term with large lifetime values for each customer.
We have had several clients for more than a decade, which is gold. Focusing on retention makes sense, especially during a recession or downturn. During these times when budgets may be limited, you can stay connected and focus on being more important to customers you already know and target. Ideally, you allocate money in your budget to stay relevant and grow.
Keeping customers and clients happy is harder now than ever before. To stay connected, I am a big fan of email marketing. It’s a cost-efficient way to build your brand and deepen your relationships through ongoing communication.
Jonathan Zacharias is the Founder of GR0.
“Three simple ways to increase customer lifetime value are to…”
Acquire customer feedback, provide personalized campaigns, and offer a referral program. A simple survey can help you learn about customer satisfaction and will indicate where you can find areas of improvement.
Secondly, sending targeted and personalized campaigns help you to engage with specific customers via tailored content.
Finally, offering a referral program improves CLV, gains exposure to potential customers, and builds loyalty with customers you already have. All in all, CLV helps you to make better financial predictions for your business, as well as to make more informed decisions for your marketing strategy.
Jessica Kats is an eCommerce and retail expert at Soxy.
“The best way to increase customer lifetime value is to offer free gifts…”
After all, everyone loves to get some freebies. This will improve customer engagement and retention. An exciting way to incorporate this into your business is to ask buyers to like your social media posts and give feedback on your products. In return, you can send them a free gift. Not only does it show that your customers’ opinions matter, but it also improves relationships and increases CLV.
It’s vital to foster a sense of community to boost your customer lifetime value. You need to make your customers feel like they’re a part of your business. Conduct polls and surveys to gauge their likes and dislikes, take feedback, and create a safe space where they can engage with each other. This improves customer loyalty and, in turn, even boosts CLV.
Alex Williams is an eCommerce business owner, a Certified Financial Planner, and the CFO of FindThisBest.
“The best way to improve customer lifetime value is to build a community…”
This is an important factor to personalize your brand. It allows you to break the typical stereotype of a faceless company that has no connection with its customer base. So, it’s advisable to create an online group to share discounts and giveaway details. This can help foster a feeling of a close-knit family, as consumers engage with one another.
You can further enhance your customer retention rate by building an ever-lasting connection by introducing a brand loyalty program. The clients can provide valuable feedback to improve your products and services, which helps improve CLV.
Greg Gillman is Chief Revenue Officer at MuteSix.
“To increase customer lifetime value, you need to decrease churn…”
To identify churn risk, turn to your historical data and comb through it for red flags. Take into account both operational insights, like declining repeat purchases or increased subscription cancellations, as well as experience insights, like low satisfaction rates or low likelihood to recommend. Once you have this model in place, you’ll start to identify patterns that will help you predict the probability of churn for each customer.
But, don't stop there. When you discover where you’re lagging, adjust acquisition and retention strategies until you see a boost in customer lifetime value. For that, consider personalizing the entire customer experience, for example, with personalized product recommendations and exclusive offers based on customer user behavior.
Josh Snead is the CEO of Rainwalk Pet Insurance.
“One way to increase your customer lifetime value is to improve your onboarding process…”
Poor onboarding is the leading cause of customer loss, which makes good onboarding essential. During the onboarding process, the customer engages with the product and—if the onboarding process has been crafted strategically—will be encouraged to come back for more.
Cayla Thurman is a Business Reputation Consultant at Rize Reviews Online Reputation Management.
“One of the best ways to increase customer lifetime value is by getting your customer service game on point…”
Customer satisfaction plays a crucial role in increasing CLV, so you need to create positive and meaningful customer service experiences for your customers.
You need to impress your customers and make sure you actively listen and address their concerns. If they can get help when they need it and have access to a library of informative materials, they will be more interested in exploring your site and purchasing additional products or services.
Matt is the Founder of MattyAds and a Silicon Valley marketing consultant.
“Most businesses are afraid to charge more, yet it's one of the quickest ways to increase customer lifetime value…”
Smart brands go through pricing changes often. The first price is never the last. And your customer doesn't expect it to be. It can be more effective to raise your price than sell more goods or services.
An informative process is to find the 10% of customers who are most needy. How often do they contact you? How many resources do you devote to them? Plot them on a graph against your most valuable customers. Price-sensitive customers are often the neediest. Your business shouldn't be about having the most customers, just the right ones. Raise those prices.
Brenton Thomas is the founder and CEO of Twibi.
“Since customer lifetime value helps you calculate what percentage of new customers is needed to generate profit…”
The idea here is to work towards retaining those clients. You can start by making the onboarding as easy and fast as possible by tailoring it to the buyer persona. Also, high-quality customer service helps create an experience that will turn your customers into loyal long-term clients.
David Reid is the Sales Director at VEM Tooling.
“It's critical to communicate with your consumer base in order to maintain your brand value…”
Email marketing is a powerful tool for keeping in touch with clients for internet businesses.
A subscription service can help you boost client loyalty by providing accessibility and personalization, two attributes that many online buyers enjoy. This not only increases revenue but also keeps clients coming back to your brand for longer.
Upselling and cross-selling are two ways to deliver extra value to an existing consumer. This is a terrific approach to attract visitors to browse your site, find something new, and add more items to their cart, increasing the average order value for each customer.
There are many ways for you to provide exceptional customer service, from offering accurate shipping times and after-sales interactions to answering questions via live chat and asking customers for feedback. Increasing client experience allows you to create a larger network of customers who are eager to buy from you again.