There are two things every business owner needs to do to boost revenue – get new clients and raise the customer lifetime value (CLV) of existing ones. The longer you can keep a customer, the more valuable they are to your company.
Customer Lifetime Value: What Is It?
The easiest way to define customer lifetime value is as a measure that illustrates how much net profit your business can generate from a single customer over time. Therefore, a high CLV indicates that each consumer will generate more money for your business. Since each customer is worth more, your business can afford to spend more to attract new customers and keep its current clientele.
How Can Customer Lifetime Value Be Increased?
Simply changing your billing cycle from monthly to year or reviewing your customer support procedure can increase your CLV.
#1: Establish An Onboarding Procedure
In order to secure long-term business growth, onboarding is the process you should put the most work into when it comes to customer success.
Poor onboarding is known to be the number one reason for churn (the rate at which customers stop doing business with a company over a given period of time). That makes it crucial to have a smart onboarding procedure to entice new users to stick around longer and boost their lifetime value to your business.
Depending on the sector, the needs of the client, or the desired results, the procedure may vary. Making onboarding as simple and quick as feasible must come first. Consider customising the onboarding process to the client while highlighting the benefits of your offer from the very beginning.
#2: Provide Premium Customer Service
To help your business expand and enhance retention, providing top-notch customer service is an essential investment. Even if your product is above average, clients will defect to other brands if your service is subpar.
According to 365 Microsoft Dynamics, 60% of consumers claim to have abandoned a brand due to poor customer service! As a result, providing excellent customer service is crucial. This will increase the likelihood that your current clients will stick around as devoted, long-term consumers.
But how can you deliver first-rate customer service that promotes client retention and lifetime value? Live chat, or real time responses on the business’s website or app, is the ideal approach to provide them with that. When a customer or potential customer has a query, they want it answered ASAP – live chat is extremely useful in that situation.
#3: Establish Relationships
Get to know your clients and their expectations – you may gain some useful information by surveying your clients, which would enable you to more effectively meet their needs. By engaging with your audience frequently, rather than only when you have something to sell, you can be proactive and keep an eye on the health of your customers. Maintaining a pulse on client happiness will also enable you to move quickly in the event of a change in direction.
#4: Provide Your Customers with a Customised Experience
Personalisation can assist you in communicating with B2B buyers through the appropriate channel at the appropriate time. These factors not only make or break a deal; they also impact whether a customer will make a subsequent purchase.
Research carried out by Salesforce finds that 56% of customers expect offers to always be personalised. The study also predicts that artificial intelligence (AI) will assist in achieving a better customer experience, as it can turn a “comprehensive trove of data into insights that can anticipate customers’ needs and act as their digital assistant.”
If you want to gradually boost client value, personalisation enables you to provide better and more valuable customer care. Additionally, it makes it simpler for customers to believe they are more than just a means of generating revenue for your brand.
#5: Suggest That Customers Change to an Annual Billing Cycle
Customers that remain loyal to your product create predictable revenue, whereas those who use it for just one or two months make very little money and hardly make up for the time and money it costs to onboard them!
Customers normally won’t agree to extending their billing cycle unless you provide them a benefit for doing so. Offering a discount (usually in the range of 10–20% off) and/or free usage for an additional one to two months or longer is a wonderful approach to entice customers to choose annual payments. This, of course, will depend on the service you’re offering.
#6: Run loyalty-based initiatives
By providing rewards for recurring business, loyalty programmes can help ensure customer retention. This can involve providing discounts or rewards, creating loyalty cards or apps, or creating point systems to accumulate points through transactions.
If these initiatives are correctly implemented, they can be very successful. You might also use the refer-a-friend technique, which enables you to recognise and reward your most ardent advocates through targeted campaigns.
#7: Promote a Customer-Centric Culture
Businesses that prioritise the needs of their customers see a rise in customer lifetime value! In order to encourage repeat business, increase customer loyalty, and promote business growth, a customer-centric approach of doing business is concentrated on delivering a great customer experience both before and after the sales process.
However, a customer-centric business needs to do more than just provide excellent customer service. Amazon is a shining example of a brand that is customer-centric and has spent years building a culture around the requirements of the consumer. They genuinely care about providing value to customers.
As the aforementioned reasons demonstrate, if you value your clients, your revenue will increase. That’s all there is to it. Giving them exactly what they need (even if they aren’t aware they need it yet) and the utmost convenience, offering first-rate assistance, and creating an incredibly personalised customer experience are all ways to demonstrate how much they mean to your company.