Customer Lifetime Value
Customer Lifetime Value, CLV or LTV, is a metric that measures the total value a customer is expected to bring to a business. It takes into account the revenue a customer generates, the length of time they remain a customer, and the cost of acquiring and servicing them.
CLV is an important metric in eCommerce since it helps businesses understand how much they can afford to spend on acquiring and retaining customers, and which customers are most valuable for them.
Increasing CLV involves several key strategies. Firstly, focusing on customer retention is crucial. By ensuring customers are satisfied and inclined to make repeat purchases, you can improve your CLV. Show that you care about their journey by providing excellent customer service and building a strong relationship with them. Stay connected through various channels, address their concerns promptly, and engage with them on social platforms to create a sense of involvement and loyalty. Additionally, rewarding customer loyalty and taking note of their feedback can help improve your business.
Secondly, keeping your offerings going and increasing average order value (AOV) can significantly impact CLV. Utilise upselling and cross-selling strategies to offer relevant products to customers, enhancing their shopping experience and encouraging them to return. Implement bundles, special discounts, and coupons to motivate customers to make additional purchases. Use email and pop-ups to stay in touch with customers even after the purchase is complete.
To effectively implement these strategies, a good personalisation process is essential. Utilise personalisation tools and analytics to serve your customers in the best possible way, analyse the success of your strategies, and utilise the information to your advantage.