There are two possible ways to grow your company.
Acquiring new customers is the first.
The second is to be focused on maintaining existing clients and increasing lifetime value (CLV).
Data shows that the second strategy is much more effective for producing steady, predictable revenue growth. 44% of companies invest more time and resources in acquiring customers. 16% focus their efforts on reducing customer churn.
Don’t forget: the longer a customer stays with you, the greater is their lifetime relationship. This is where the customer’s lifetime value comes in.
What Does Customer Lifetime Worth Look Like?
Here’s the simplest definition of customer life expectancy – it’s a measure that shows what net profit your company makes from one customer over a period.
This means that each customer will bring in more revenues for your company if they have a high CLV. As each client is valued more, your company can spend more to acquire and retain new clients.
How Do You Increase Your Customer’s Lifetime Value?
There are many ways to increase your CLV. It can be as easy as changing your billing from monthly to annually or as difficult as redesigning your customer support. Below we have proven techniques to increase CLV and get more from customers.
1. Improve The Onboarding Process
For sustainable growth in a small business club in Sydney, it is essential to focus all your efforts on customer success. Poor onboarding is a leading cause of churn at 23%. It should be one of your top priorities.
It’s there that your customer truly engages with your products and where you can make a positive impact. To keep new customers coming back, and to increase their lifetime value, it’s essential to develop a strategic onboarding strategy.
Many variables can affect the outcome of the process, such as industry, customer requirements, or desired outcomes. To engage customers, businesses have a few key points to remember. First and foremost, you must make the process of onboarding as smooth and easy as possible. The process can be simplified by creating walkthrough guides or interactive how-to videos. This can also help customers meet their goals.
2. Customers Will Be Engaged If You Provide Value-Packed Content
Email marketing is a great way of retaining customers. But many businesses go about it wrong. Instead of sending valuable content, automated drip marketing campaigns are run without any value.
The emails which emphasize your product/service worth are best for your customers.
Send an email to your clients every other week if you offer accounting services. Tell them how much money you have saved them each month.
Provide help desk software to your clients. Send them a monthly newsletter informing them about how many support tickets you’ve solved.
If you’re selling an environmentally friendly product, ask your customers to email you and tell them how much more carbon dioxide they produce by using a product other than yours.
Every product or service delivers value. Finding that value is the key to creating an effective message and presenting it to your customers, is what will make your message stand out. A promotion email that explains what benefits you have goes a long way – CLV-wise – more than any other promotional email.
3. Service To High-End Customers
You must invest in customer service to ensure your business grows and keeps customers happy. Your customers will move to other companies if your service is not up to standard, even though your product is top-notch. Data reveals one-third (33%) of consumers are most likely to switch brands due to poor customer care.
Therefore, customer service should be a priority. Improved customer service means a better experience for customers. That will result in your existing customers becoming more loyal, long-term clients.