18 Ways to Increase Your Overall Customer Lifetime Value

Retaining existing customers has been proven to increase a company’s profitability from anywhere between 25% - 95% - depending on the nature of the business. While acquiring new customers is vital, customer retention, and increasing overall customer lifetime value (CLV), is what will underpin the long term growth of your business.

So, what does the term ‘customer lifetime value’ actually mean? Put simply, customer lifetime value measures the revenue generated by a single customer between their first purchase with your business, to their last. It’s the entire value that a single customer brings to your business. Obviously, we all want to increase customer lifetime value - increasing customer lifetime value not only helps to achieve long-term stability, but it also enhances the experience for your customer, and improves brand reputation, and loyalty.  

While most people will understand the importance of customer lifetime value, many struggle to improve CLV within their business model. So, Stamp Me have put together a list of 18 tangible ways that your business can improve customer lifetime value in 2023 – categorized into customer acquisition and retention programs, customer experience, community and relationship building, revenue building, and product development and innovation.

Implementing these strategies will help to increase your CLV, take your business to the next level, and separate you from the competition.

18 Ways to Increase Customer Lifetime Value

Customer Acquisition and Retention Programs: ‍

1. Referral Programs

Word-of-mouth is a powerful tool. By introducing a referral scheme to your customers, you are incentivising them to champion your brand, and spread the good word about your business. An effective referral program will help to quickly increase your customer base, while also rewarding your best brand ambassadors, creating deeper brand loyalty, and increasing overall customer lifetime value.

‍

2. Loyalty Programs

Creating a loyalty program is a powerful way to increase repeat purchases, improve brand loyalty, and reward your most loyal customers. Whether it’s discounts, digital vouchers, free products and services, or VIP experiences, a good loyalty scheme allows your business to show its appreciation and incentivizes customers to return. Not only will they return to purchase from you again and increase their overall value proposition as a customer, but they will also likely tell their friends!

3. Re-Engagement Strategy

Just because a customer hasn’t engaged with your business in a while, doesn’t mean it needs to be the end of your relationship with them. When a customer becomes disengaged or inactive, an effective re-engagement strategy is a brilliant way to win them back.

Re-engagement can be done in many ways, but it is important that you provide an incentive for customers to return and remind them why your business is their best option. Targeted email campaigns are a great way to do this, and personalized, exclusive offers are always appreciated by consumers.  

Customer Experience:

4. High-Quality Customer Service

Every customer interaction matters. If you are looking to increase customer lifetime value, and cultivate a loyal customer base, it is vital that you create memorable experiences for your customers.

In 2023, consumers expect high quality service. So much so, Microsoft found 61% of customers will dump a brand over poor customer service. Companies that offer a superior customer service, and prioritize how they look after customers, create a significant competitive advantage, and separate themselves from the pack.

5. Personalized Experiences

Today’s average consumer expects personalization. With the data that businesses have, providing personalization is very manageable, and extremely effective.

By leveraging customer data, your business can provide customized offers, targeted recommendations, and personalized communication. This type of personalization helps to create a deeper level of engagement with your customers, creating greater satisfaction, and fostering brand loyalty.

6. Customer-Centric Approach

For any successful business, the customer is at the centre of everything they do. If you want to provide an exceptional service, and grow your business, you must first truly understand your customers. Gather information on your customers preferences and pain-points, and then tailor your products and services to give them what they need.

A customer-centric approach helps customers to feel like they are part of something bigger, and therefore, it will lead to a deeper connection and greater loyalty – increasing their overall value as a customer to your business.

7. Actionable Feedback

To be insanely customer-centric, you must truly understand your customers. Through conversations, surveys, reviews, and social media, you can determine what your customers love about your product or service, but also what their pain-points are.

It is vital to collect all this information, identify the main issues, and implement the solutions to resolve them. This will make your customers feel heard and appreciated, and that you are committed to serving them. A business that listens, learns, and acts, will have a tribe of lifetime customers.

‍

8. Improved Onboarding

First impressions matter. So, you better make sure you create a seamless onboarding experience and make it simple for your new customers. Make them feel welcome, make them feel special, and set a precedent for how your business operates.

For some consumers, the thought of getting started somewhere new, or learning a new system is daunting. With an effective, easy onboarding experience you prevent any confusion, or frustration and improve CLV in the process.

9. Proactive Support

Don’t wait for issues to arise before reaching out to support your customers. If you anticipate what a customer needs before an issue arises, and provide proactive support, you make them feel they are being well looked after. This creates a greater level of trust and loyalty, and it helps to prevent any problems further down the line.  

‍

10. Value-Added Content

Providing valuable content is a no-brainer for any business looking to solidify themselves at the top of their industry. By offering entertaining or educational content, it establishes your business as the experts in your field and provides value to your customers. Creating content like blogs and webinars for your customers helps them to feel they are getting more for their dollar, and that they are working with the best in the business.

Community Relationship Building:

11. Relationship Building

When a customer feels appreciated, they are more likely to stay loyal to that business. Building long-term, meaningful relationships with your customers is an extremely effective way to increase customer lifetime value. Your business will stand out by going the extra mile, listening to your customers, being personal in communication, and fostering deeper relationships.

12. Community Building

In addition to building a relationship with your customers, building community around your brand is an incredible way to improve overall CLV. When a customer feels like they are part of something bigger than just a product or a service, they are much more likely to remain loyal, for a longer period of time.

There is a variety of ways to create community around your brand. It takes time, but you will reap the rewards when it is done right. Some of the most effective ways to foster connection include hosting community events, creating online spaces to share content, and offering exclusive content or promotions to community members. ‍

Revenue Maximization:

13. Cross-Selling and Upselling

Upselling and cross-selling are very practical ways to increase customer lifetime value, but they must be implemented correctly. It is vital that you are thoughtful and considerate when approaching customers, and only suggest an upgrade, or additional product or service when it makes sense for that customer.  

When these methods are applied properly, it quite literally increases the value of that customer to your business. There are multiple ways to do this, including product bundling, personalized recommendations, and early access to new products for loyal customers.  

‍

14. Annual Billing Promotion

In short, an annual billing promotion offers a discount to those customers that pay for 1 year upfront. Implementing this promotion helps to increase your customer retention, improve cash flow, and reduce churn.

Moreover, it provides greater value for your customers. Those who opt for this option, pay less per month, so it’s a win-win for everyone.

15. Dynamic Pricing

While a dynamic pricing strategy is slightly more complex than some of the other tactics mentioned, it is just as effective. Implementing a dynamic strategy means that you adjust your pricing on factors such as supply and demand. This includes offering discounts when demand is low, and maximizing profits when the demand is soaring.

When it’s done right, a dynamic pricing strategy will help your business to react to market changes, stay competitive, and improve customer satisfaction.

16. Payment Management

Unfortunately, getting paid for your products or services is not always a simple, seamless process. As a business, it is vital that you stay on top of payments and properly manage any failed payments, or customer delinquencies.

To avoid cash flow issues, you can implement a variety of strategies, including automated payment reminders, customized payment plans, and proactive communication with customers. These tactics will prevent missed payments and other issues, therefore increasing customer lifetime value.

Product Development and Innovation:

17. Product Roadmap Sharing

Providing a product roadmap is one of the best ways that you can create community around your brand. Customers want to feel like they are part of the journey, and part of the process. By sharing the details on future releases and updates, you will build anticipation and excitement among your customer base, and with potential customers.

Additionally, sharing a product roadmap is a great way to reduce churn. When customers see a clear vision of where your brand is heading, they want to stick around to be a part of the journey.

18. Continuous Improvement

To succeed, and even just to survive, you must always innovate. From the product or service that you sell, to your employees and overall customer service, you always need to invest in continuous improvement.

Gathering customer feedback, and investing in research and development, will provide the foundations. From there, it is all about implementing what you have learned to meet the evolving needs of customers, maintain a competitive advantage, and better serve your customers. In turn, you will attract new customers, and build long-lasting relationships with your existing customers.

Sources:

Microsoft: State of global customer service report

‍