When you come to know your valuable customers, is when you will focus on the customer acquisition & retention strategies for finding them and converting them or staying loyal with them. Customer Lifetime Value is mainly used in two different areas in the business –one is customer acquisition & the second one is customer relationship management. Let us look at the LTV meaning in detail here:
If you do not know the real value of the customers, you can wind up spending lots of money on getting customers who do not offer any ROI.
Their primary goal is to know how much this can cost you to get the most valuable customers & retain them, thus you will know if you are making positive and negative revenue for every client.
1. Implement the Customer-Centric Policy
Each company has got its return policy, though that policy says “no refunds and returns, no exceptions.” Then one way you can win your customers trust, and repeat business, will be alleviating any fears about shopping with the brand. Any strict return policies, fees restocking, as well as return costs, will make the customer skittish on making the purchase. Suppose they need to make the return, which winds up costing money, you may bet they will be put off to make any future purchases.
2. Invest for the CLV Growth
Whenever you know the customer lifetime value, it is important to analyze and figure out various areas that can provide an impact while trying to improve this out. Essentially the CLV is a product of 3 important factors and they are:
- Customer Lifespan
- Purchase Frequency
- Average Order Value
Whenever you look at the CLV as the product of 3 different components then you will determine which particular area needs help as well as invest in the area heavily. For instance, if you find an average order value is the lowest component of the CLV you may look into boosting this with the tactics such as product bundling, cross-selling, and much more.
3. Treat Every New Customer Nicely
Rewarding your loyal customers is given, however, you do not want your new customers to feel totally neglected unless they are dropping a lot of money. It is the careful balancing act that will appeal to new & existing customers. So, you need to improve the acquisition & encourage your new customers to come back just by giving them the exclusive deals and offers that will get redeemed by the new customers.
The tiered customer loyalty plan is the best method to give your new customers the immediate reward all along with an encouragement to carry on shopping. It offers short-term value on the long-term value, which will encourage new customers for shopping again.
4. Provide Quality Customer Care
Poor customer service can be the deal-breaker, doesn’t matter how much popular the business is. Most of the time, you will get what you are giving. Thus, you need to make sure the best customer care.
Here are a few actionable tips to offer the best customer service:
- Provide omnichannel support & 24/7 support
- You must go above & beyond, even if it is not part of your job
- Create the knowledge base, which customers may access very easily
- Have the Live-chat support as chatbots will backfire
- Figure out some common pain points & solve them at the earliest
- Listen to your customers’ feedback & act on it
- Follow-through & deliver on the promises and build trust
- Implement all these strategies & follow the customer service principles, so you will see a significant improvement in customer retention.
- Provide personalized services or exclusivity similar to detailed & useful tutorials, which Adobe offers to the animator users
5. Reward Your Customer Loyalty
Suppose you are looking for a way you can get more customers to return often & spend more while they do, look into offering the reward program, which pays them for the loyalty. The data shared showed around 73% of the millennials said that their purchase habits were influenced straight by the loyalty programs. Around 60% of the consumers are persuaded to make purchases with the brands, which have loyalty rewards programs. So, you can tailor the loyalty program and target the specific customer segments at such specific shopping time and seasons.