In fact, profit increases as a result of focusing on this goal can range anywhere from 25-95%. A fact that, we’re sure you’ll agree, makes the 5% increase possible from an acquisition drive seem like an insignificant drop in the ocean.
Despite that, 44% of companies continue to focus their efforts on the acquisition side of things, offering as it does an extended market reach and the possibility of new word of mouth opportunities. But, as they’re quickly coming to find, long-term results simply aren’t plausible or cost-effective this way.
That’s not to say, of course, that acquisition doesn’t still deserve a place in your marketing techniques. How else will you build an audience from which you can create CLV in the first place? Still, once you have a decent customer base on-hand, it’s vital that you work to increase lifetime value as much as possible and we have three key suggestions for helping you do just that.
# 1 – Build a customer loyalty programme
Customer lifetime value is technically defined by the net profit contribution of any given customer over time.
This, mixed with the fact that as many as 6 in 10 UK shoppers expect loyalty programmes as standard means that a focus on customer loyalty is the best tool you have in your arsenal for CLV results you can rely on. After all, the accumulation of points or other offers ensures that value is a two-way street, giving consumers a pressing reason to keep coming back to you, and thus increasing their CLV as a result.
Of course, with markets ever-evolving and loyalty programmes now utilised across the board, your success in this field is about more than standard stamp-based loyalty efforts. In fact, 70% of loyalty programmes are now hosted through apps for ease of use, meaning that the implementation of any programme here comes down to your understanding of not only what your audience wants, but also the technology necessary to make it happen.
Fortunately for you, the 95% of consumers calling out for unique or different loyalty focuses has led to specialists in this field who can make loyalty programmes much easier to build through the development of partnerships. As well as making it easier to deploy your programme, partnerships like these ensure you have access to the technology and expertise necessary to see significant CLV increases when you need them most.
Partnership efforts will prove especially useful in building your loyalty programme when paired with further effective loyalty focuses including:
- Geo-located targeting
- Level one loyalty that’s easy to achieve
- Personalised focuses
Then, you need only focus on making sure that consumers are aware of the loyalty offerings they stand to enjoy from returning to shop with you. As simple as that, CLV and the reduced churn you can see off the back of it shouldn’t be such an out-of-reach goal after all.
# 2 – Use that programme to upsell
Loyalty is the backbone of CLV but when combined with upselling, that’s when you’ll really see the difference in your profits. While it might have something of a poor reputation, upselling is far from a dirty word. Rather, this is yet another invaluable tool which, believe it or not, can bring you closer to your consumers and the CLV that you’re forever aiming to increase.
That’s because, as experts like Jeffrey Gitomer explain, upselling done well is all about providing the best possible value for your consumers, so that they go on to provide the best possible value for you. All the while, your efforts here could lead to around 70-90% of your profits, compared with the mere 5-30% created by an initial or one-time sale.
The question is really how you upsell well in relation to your loyalty programme. Apps, especially, make upselling upgrades possible, a benefit that you can pair with loyalty discounts to do well by your consumers, all while increasing their spending over time.
Equally, upselling after so-called ‘customer milestones’ can prove efficient to this end, providing as it does a personalised and sometimes scarce loyalty offering that further drives ongoing purchases. This could be a limited-time opportunity to join an exclusive, but ultimately more expensive, membership club. Or, you may offer the chance to gain free shipping or some other such loyalty perk on purchases over a certain amount for the entirety of a consumer’s birthday.
These methods are all genius for providing a sense of satisfaction for consumers that still involve the maximum profits on your part. What’s more, these efforts go a long way towards showing customers that you care, and ensuring they feel happier to keep shopping with you as a result.
# 3 – Surprise, delight, and engage
Remember what we said about 95% of consumers looking for loyalty offerings that go against the grain? Well, that’s an excellent starting point for our next and last suggestion, which is to do whatever you can to surprise, delight, and engage.
Let’s face it, repeat custom becomes increasingly unlikely if you offer the same predictable products and offers indefinitely. By comparison, loyalty offerings that change often or use varying tactics can work wonders for keeping consumers on their toes. And that’s always going to provide better CLV results for your bottom line.
In keeping with that expectation, it therefore pays to think about various techniques within loyalty offerings and beyond, including:
- Scarcity — Discounts that either reduce or altogether run out on a specific date
- Gamification — Discounts that literally turn otherwise bland CLV efforts into fun games
- Geolocation — Location-specific retention efforts that prove relevance/customer value
- Third-party partnerships — Discounts or similar that involve more than just bland in-house processes for deals that are always worthwhile
These loyalty offerings can be implemented even more easily with the help of loyalty programme specialists — these can help you set up a bespoke loyalty programme perfect for your customers. This takes the effort out of putting all of the above elements together as a specialist has all the tools to do it for you so that it’s tailored to your consumers.
Surprising and engaging email marketing or social media content can also prove invaluable where CLV is concerned. By particularly focusing on content that maps customer journeys and demonstrates your loyalty values, you can ceaselessly surprise and thus convert loyal customers more regularly than ever before. All while stepping outside of that boring old business acquisition mould!
Creating customer lifetime value with a little value of your own
It’s all too easy to assume that CLV is all about what your consumers can do for you, but this misconception alone could cost you the best customers you stand to find. Instead, it’s vital that you realise that CLV is actually a two-way street.
Looking at each of these pointers, for instance, it’s plain to see that your focus here should be as much about what you can do for your consumers as it is about what they can do for you. That realisation frees you to think, openly, about the best possible programmes, partnerships, and techniques for engaging and retaining customers in the long-term. And that, in turn, is really what CLV and your loyalty focuses should be all about.