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5 Smart Tactics to Increase Customer Lifetime Value

5 Smart Tactics to Increase Customer Lifetime Value

It costs a lot less to keep existing customers than it does to find new ones. As a result, looking after and increasing the amount of business you do with your customers is a great way to drive growth. This blog is all about how to look after and retain your existing customers. You'll find all kinds of information about how to acquire new customers online, and it's obviously important that you do so. However, it's business-critical that you not only look for new customers but take good care of the ones you have. 


It costs up to seven times more to find a new customer than retain the one you have. As a business, you should have a plan to increase what’s called your “customer lifetime value” - the amount of business you do with customers you already have. The happier your customers are, the more valuable your business will be for them. Here are some proven tactics to help you improve your customer lifetime value. 


1) Create A Personalised Experience


If they shop with you online, create a personalised online shopping experience. A good example is Amazon. When you log in you’ll find lots of items being recommended to you based on what you've bought in the past, as well as what you've been looking at recently. As such, no two customers are going to see the same thing. You can do something similar for your customers. You can use their data to recommend products to them. Invespcro says that an existing customer who already has a relationship with you is up to 70% more likely to try something new than you are offering them, as opposed to a new customer who's only 20% likely to do the same. 


2) Reward Customers For Repeat Orders


Customers appreciate loyalty programs. They work because they give something back to the customer every time they buy from you. Loyalty rewards could be free shipping, money off an order, or a free gift. Whatever you think your customers will appreciate. Throughout the year you can also offer additional loyalty points to customers who come back and make new orders. This is usually pretty simple to set up. Loyalty schemes are tried and tested and they work. 


3) Use Email Marketing with imagination


Email marketing is another highly effective tool, even in the age of social media. This type of marketing is usually used to drive sales and advertise promotional offers but, according to Sam Burns, a marketing expert from Academized and PhD Writers, “Email is an excellent way to give your customers more value”.  For example, emails can be used to send content that educates or entertains your customers. It’s not just about promoting sales. A good example is the makeup brand Sephora, which sends out useful guides for using its products. 


4) Have A Customer Friendly Returns Policy


Creating a returns policy that's friendly and easy to use can actually help improve customer retention. When you have an easy-to-understand returns policy, it helps customers feel more relaxed about buying from you. Some brands, like Zappos, actually find their best customers have the highest returns numbers. They return more, but they buy more too as they know they can shop with confidence. 


5) Acknowledge Your Best Customers


As a business, you will probably have access to data that tells you who your best customers are. Do something extra to keep them happy. “Customers will always like it if they're treated well for being loyal to you,” says blogger James Deacon, from Essay Services and the State Of Writing. “If you're giving them extra for being top customers, they'll keep coming back for more.” Try different kinds of rewards such as exclusive discounts, personalised content, free items, and more. You’ll quickly learn which are the most popular. Whatever you give your best customers, it should be exclusive to them. 


Conclusion


These are just a few tips on how to increase your “customer lifetime value”. It’s all about rewarding the people you most want to reward - your best customers. It's more cost-effective than chasing new customers and you'll hopefully establish a long-lasting relationship that works for both of you. It’s a win-win.


by Emily Henry | 25 Jan 22

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