How to Increase Customer Lifetime Value for your Ecommerce Business?
LTV of a customer or the LIFETIME VALUE of a customer sums up the total revenue that the customer will bring to your business over a period of time. It is a forecast of the net profit obtainable during the period of relationship with the customer.
LTV of a customer is an important metric that every e-commerce business owner should be aware of. Rather than focusing on the sudden and brief success points, LTV concentrates on long-term value. It impacts each and every aspect of an e-commerce business. And hence, there is a direct correlation between LTV and business revenue which means that increasing LTV results in higher profits.
Now that you understand what LTV means and how important it is for your business, you can implement the following strategies to build the lifetime value of your customers –
Emails, newsletters, and e-blasts
There are more than 200,000 companies with web sales in the US alone. With that kind of crowd, you cannot blame a customer for forgetting you. Keeping in touch with your customers is important and the best way to keep your brand at the center of your customers’ mind is by sending them timely and well-crafted emails, newsletters and e-blasts.
Despite the evolution of digital communication mediums, email remains one of the best and most effective marketing tools of the current era. A well-run email campaign can help you turn your business around. Use the assistance of a campaign management service provider or employ mail management software to send out highly engaging and personalized emails to your customer. Get creative with your emails and use them to drive traffic to your other channels as well.
Don’t be misled by this, yet another marketing jargon. Multichannel marketing simply means creating a space where your customers can continually receive subtle reminders in the form of marketing messages from you. You can also use the various platforms present to offer exceptional customer service to them.
We are dealing with a generation of customers whose online presence makes it easier for us to reach them and connect with them. Creating as many engagement points as possible and implant your brand in the customer’s mind slowly boosting his/her LTV. Featuring a fan’s content on a Facebook post, posting an informative tweet or releasing a fun video on YouTube – all can do the trick.
Amazon is the epitome of the kind of success the subscription-based model can bring to a business. Consider the e-commerce behemoth’s strategy. Amazon was known for offering competitive pricing on products and easy return policy. It then introduced its subscription model at $79 offering free two-day shipping on all eligible orders. And what did customer have to do after getting the subscription? Continue to buy from Amazon until the subscription period ends.
Recurring payment options make customer stick around for a longer time thereby improving their LTV. Traditional models, on the other hand, are prone to unpredictable customer LTVs and do not guarantee the steady inflow revenue as in the case of subscriptions.
Customer loyalty program
Loyalty programs date back to 1800s and have claimed to be the most effective form of premium marketing ever since. Customers tend to come back and stick around longer when they are offered a little more than what they paid for. That’s the general consumer outlook and loyalty programs offer the best way to leverage this mindset.
For e-commerce, you may want to add a loyalty program function to your e-store or try any third-party software offering the same. There are several types of loyalty program formats that are currently being used. You can choose the best one depending on what your business is offering.
Customers are driven more the experience they have with you than by what you offer. Businesses understand the essentiality of customer experience in boosting customer lifetime value and hence strive to make every second the customer spends on their site worthwhile.
One way to offer extraordinary customer experience s by making it extremely easy to shop with you. By making sure that your e-store offers easy username and password retrieval, and saves payment and shipping info in customers’ accounts, you’ll make shopping a smooth for repeat customers. The customer should not feel overwhelmed or confused while on your site.
Another technique is to personalize the website’s content as per the liking of the customer. Use customer data to understand preferences and predict what the customer might be looking for. Customize the customer experience to suit each buyer’s need and make it easy for them to find the products and information they’re most interested in.
On a Final Note
Converting a prospect into a customer is surely a big accomplishment. But what’s bigger is nurturing that customer to make him/her your brand’s evangelist. And to achieve that milestone, you need to do more than just market and promote your products and services to them.
Your customers run your business and are crucial for your business’s existence. So, it becomes all the more important to make them feel special. Whether you do that by offering extreme convenience or by putting your customers in the limelight, it’s up to you. Whatever you do, make sure that your customers remember you and come back to you.