The importance of customer lifetime value to business can’t be stressed enough. Study shows that nurturing the CLV results in a 5% increase in retention, and it produces a 25% increase in profit, not to mention existing customers actually spend 67% more on average than new ones. Because of this, eCommerce businesses can increase their return on investment (ROI) by concentrating more on boosting client lifetime value while still bringing in new consumers.
There are two methods for expanding your company. Getting new clients is the first step. The second is to concentrate on keeping current customers and improving their lifetime value. According to a Bain & Company report the customer lifetime value or CLV is valued by marketing leaders twice as much as the bottom 25% of organizations.
In addition to being essential for growing sales, CLV is a crucial metric for:
Maximizing the lifetime value of eCommerce subscription customers requires understanding their needs and preferences, building loyalty, and creating value-added experiences. Here are 5 tried-and-true strategies you can employ to promote repeat business and keep clients returning to your company.
Offer different subscription plans at different price points to cater to different customer needs. Consider offering discounted prices for long-term subscriptions, as this can encourage customers to stick around for longer.
You may reach a wider range of clients with varied requirements and tastes by providing a number of subscription options. As a result, your subscription customers’ lifetime value may rise along with their satisfaction and commitment to you. Before introducing any subscription choices, it’s crucial to confirm that each is profitable and sustainable for your company and that you have a firm grasp of your consumer base’s requirements.
Provide many subscription tiers at various pricing points. Each tier ought to have a distinct set of characteristics and perks. In contrast to a premium subscription, which might provide complete access, additional features, or exclusive material, a basic subscription might only grant limited access to your product or service that is equally enticing to their needs or preference.
Nowadays, personalization is crucial if you want clients to be satisfied and spend more money with your company over time. After all, according to 81% of consumers, businesses should be able to recognize their needs and know when to reach out to them.
Also, roughly 77% of customers seem to have spent more money with referred businesses that provided a personalized service or experience. The majority of B2B marketers that tried website customization believed it was successful, and B2B purchasers undoubtedly desire a more individualized experience.
For each customer category you have, you can customize them to create highly tailored messaging, improving your chances of converting users from lower-paid plans to higher-paid subscriptions. On the flip side, you should also give your customers the option to downgrade if needed–which is ultimately better than losing them altogether. You can then work on persuading them to upgrade to a higher tier by monitoring their behavior and offering promos based on that.
Sending the perfect message to each subscriber at the ideal time is marketing’s ultimate goal. Use consumer information to individually personalize marketing offers and messaging to each customer. Provide them with tailored product suggestions based on their previous purchases and browsing patterns.
Upselling and cross-selling are two ways you can significantly increase client spending. Upselling is one of the simplest methods to increase your CLV if you offer a variety of related goods or services, have several pricing levels, or base your charges on things like product consumption, seats, etc.
One way you can cross-sell and upsell to your current clients is by offering temporary upgrades. Consider offering a free temporary (7-day or 14-day) upgrade to your premium plan to consumers who hold a basic membership. Once they experience the benefits of your more expensive membership, some individuals might be ready to totally make the switch.
When a charge to a customer’s credit card is refused, a dunning management system is a solution that drip-feeds renewal alerts to them. It also automatically retries a failed payment or an expired credit card. It turns out to be essential for every subscription business, minimizing churn caused by consumer displeasure and frustration.
Additionally, by enabling automatic charge retries, dunning management can decrease your turnover rate and raise your client lifetime value. In this method, accounts won’t close before they should because you can charge the card again, say, a few days before the account is due to be canceled.
Send an email reminder, this solution informs clients of the precise renewal window for the service. Since they don’t have to check your FAQ page or contact your support team via phone or email, many customers would probably enjoy this kind of reminder because it saves them time.
Happy customers are loyal ones. Work on retaining current customers alongside engaging new ones. One way to do so is by building a referral program that compensates current customers for referring new customers and delivering tailored emails or incentives to promote renewals. Create a loyalty program that honors patrons for their continued support. You can also entice clients to renew their subscriptions by providing discounts, special offers, or other benefits.
The referral strategy is an effective kind of word-of-mouth promotion. The customer is eligible to receive extra points or other benefits for each referral that makes a purchase. Having a deadline can also provide a sense of urgency and encourage customers to use their incentives on more purchases.
It always pays off to put consumers first. By seeking their input, responding quickly to their issues, or thanking them for their continued support, you can build a stronger relationship with them and demonstrate how important they are to your business. Maintaining your current, devoted clients, lowers your long-term costs and improves your total marketing ROI. The tips we enumerated in this article will help you expand your business more quickly by improving CLV.
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