Profit margins for a business are mostly based on a loyal customer base. Regular customers spend 67 percent more on average than new customers, and a mere 5 percent increase in client retention can increase revenues by 30 to 90 percent. It’s time to change if customers are unimpressed by your customer service or if your customer lifetime value (CLV) could be better. This article will define CLV and explain why it’s essential for e-commerce success. We’ll also discuss some practical strategies for raising your CLV for better outcomes.
The term “customer lifetime value” (CLTV) describes the value a client contributes to your company throughout their relationship. This considers every purchase a consumer has ever made from your store, from the first to the last.
The Average Order Value (AOV), the frequency of repeat transactions, and the average retention time are simply multiplied to determine CLTV.
The following ways can help you maximize your customer’s lifetime value:
The onboarding process should be one of the top objectives for ensuring client success. Inadequate onboarding is the primary reason for churn, accounting for 23% of all cases. Here is where your customer actually interacts with your offering, and this is also where you may have the biggest positive influence. The onboarding procedure must be as quick and easy as possible. This can be achieved by simplifying the process using walkthrough guides, engaging how-to videos, packaged tutorials, and other information that can help users achieve their goals.
One of the finest strategies for customer retention is email marketing, yet many companies do it incorrectly. They operate automated drip campaigns without providing any value in place of sending content that is rich in value. Any good or service is worthwhile. Finding that value and communicating it to your audience in a way that highlights your contribution is the key to an effective message. From a CLV standpoint, an email highlighting your advantages is much more effective than a promotional email.
Nowadays, personalization is crucial if you want clients to be satisfied and spend more money with your company over time. After all, most consumers believe firms should be able to recognize their needs and know when to reach out to them.
High-quality customer service is a must to develop your business and enhance retention. Even if the quality of your product is above average, if your customer service is subpar, clients will leave for the competition. According to data, one-third of consumers are inclined to switch brands after just one bad customer care experience.
Being present on as many channels as possible is crucial for a company. Cross-channel interactions significantly impact customer retention. You should research the most popular channels used by your clients. While you simply provide email and phone help, perhaps they are more active on Telegram and Twitter. Once you are aware, make sure your support staff is adequately trained in using each of those channels, or if funds permit, form separate teams with one person in charge of each channel.
Individuals (whether they are B2C or business buyers) want answers to their questions and support requests quickly. Offering 24-hour customer service is one of the finest ways to do that. It is pricey, but it is also worthwhile. However, if you are unable to offer 24/7 help, make sure your staff can attend to consumer requests as quickly as feasible.
Most business buyers—around 90% of them—want real-time responses and interactions from the firms. Live chat, which allows customers and businesses to communicate in real-time on a company’s website or mobile app, is the most effective approach to provide them with that.
Live chat is incredibly beneficial for organizations, according to the research. Customers prefer live chat because it provides prompt responses, according to about 89% of respondents. There is also lots of space to enhance conversions with live chat because website visitors who utilize it are 3.5 times more valuable than those who don’t.
Your revenue will increase if you value your clients. That’s all there is to it. Let customers know how important they are to your company by soliciting and acting upon their feedback is important. You must provide them with everything they require—even if they aren’t yet aware they need it—and the greatest convenience by offering excellent customer service and support and creating an incredibly personalized experience. If you want to learn more about CLV, and other such topics, UNext’s Executive Program in Strategic Sales Management is perfect for you. Besides IIM Indore certification, you get hands-on training from industry experts.