“A satisfied customer is the best business strategy of all”, the American business author Michael LeBoeuf once stated. Customers are the foundation of any business. They are the ones who drive the revenue, after all. No business can exist without its customers. Given that customers are one of the biggest stakeholders if not the biggest, companies need to predict how valuable a customer is to the business over time.
What is CLV?
CLV or Customer Lifetime Value is the measure of total revenue a business earns from a customer throughout their association with your company. The metric is absolutely essential when it comes to business. Not every customer is valued equally. Since keeping an existing customer is less expensive than finding a new one, maintaining a high CLV is key to the success of your business. Ultimately, a higher CLV equals more loyal customers. Let’s take a quick dive into the six ways you can maximize CLV for your business.
Pay Close Attention to Your Customers
It goes without saying that if a customer is happy, they are likely to continue their ties with your business. In order to keep a customer, it is important to understand them and pay close attention to their needs.
Taking time to review accounts with the customer can show them that you’re not only keen to do business but also want their feedback to improve upon their experience with your brand. Collating information from multiple portfolios can help you come to common pain points as well as common praises.
All this feedback can help make relevant changes to your business instead of blindly jumping from one customer or product to the next.
Make Onboarding Hassle-free
CLV is all about getting a customer to continue ties with your business longer. A customer’s journey with you begins at the point of onboarding, so it’s important to make a good first impression. Whether it’s B2B or B2C, customers want what they want earliest. Once they plan to do business with you, they will want them delivered yesterday. Leaving aside the standard lead times, making things slick and quick will leave customers happy and coming back for more.
There is no one size fits all approach for onboarding. Each customer has different needs and expectations so the onboarding process needs to be tailored accordingly. Rely on your business and sales team to do what they do best and take the business forward with new customers.
No one wants to be a faceless service brand in the world of business which is why community building becomes key.
A community refers to a close-knit group of people with common goals and aspirations. For businesses too, this holds. If you give customers a space to engage with like-minded individuals after a smooth onboarding, you can foster loyalty and improve CLV in return. A community, after all, serves, as a useful exchange of ideas, and users can help each other in availing your products and services efficiently.
Once a part of your community, customers feel better connected with your brand as their connection to it will be intertwined with the group that they now feel a sense of belonging.
Optimize Customer Service
Better customer service results in a better customer experience, which in turn increases customer return and bolsters customer lifetime value. Ensure that your business is active on various social media channels, as statistics show customers use a minimum of three different communication platforms to connect with support.
The next step lies in finding the channel that most clients opt for and allocating your resources accordingly. Customers demand a speedy fix to their concerns so ideally 24/7 live chat support helps meet their expectations and needs better.
However, if you’re a start-up and don’t have enough resources to enable live support, a fast response also helps. 84% of customers expect a response within 24hrs of posting a complaint on social media.
Reward Your Loyal Customers
Every customer loves an acknowledgment of their unwavering affiliations and loyalty towards your business from time to time. By finding out the customer lifetime value of each customer, you can figure out who your most loyal customers are. It might be a perfect opportunity to foster your ties with them by providing special offers. These offers may include subsidized or free shipping, early access to goods, and guaranteed availability of limited products and services.
Rewarding your most loyal customers will certainly retain them longer, and lead to a greater customer lifetime value in turn.
Since the probability of selling to an existent customer is 60-70% explains why companies aim at achieving a much higher ROI by improving customer lifetime value than obtaining new customers. Optimising your marketing ROI also means you don’t have to spend extra resources on gaining new customers to drive sales. Therefore, when done correctly, improving CLV can bolster your relationship with clients and retain them longer, which will further boost your business.