Follow these highly Effective Strategies to boost your ecommerce customer lifetime value!
It is of utmost importance for E-commerce businesses to identify and nurture the valuable customers to drive a great revenue and business growth and this is the area where focusing on Customer Lifetime Value (CLTV) comes in.
Experts at IndGlobal Digital- a leading Ecommerce Development Company in Bangalore suggest that you need to understand the fact that Customer Lifetime Value will be different for different customers. So it’s required to calculate the CLTV for different customer segments. For every eCommerce business, there are certain important eCommerce marketing KPIs to track such as number of orders, profits, revenue etc. However, there is one metric that may have the power to impact your bottom line thus improving your success is CLTV- customer lifetime value, and today we’re looking at how to improve it. Once you master the following strategies you will be well on your way towards a more profitable eCommerce business!
What Is Customer Lifetime Value?
Customer lifetime value refers to the total amount of revenue that is going to be generated by the average number of customers throughout their relationship with your ecommerce business. It is abbreviated as CLV or CLTV. It takes into consideration those variables like purchase frequency, average number of orders and average order values etc. CLTV marketing is used to improve the lifetime value of each customer. It can also be considered as the total amount of money that someone spends with your brand over a complete period of customer lifetime. This is linked with their first purchase to the last one before they drop out as a customer from you and never shop from your ecommerce store again.
Ecommerce Experts from the top ecommerce development company in India say that the customer lifetime value definition refers to the total revenue that is earned from a single customer.
Why is there a need to boost the CLTV of your E-commerce business?
One-time customers are more often as compared to the seasonal shoppers or discount hunters. On the other hand, a loyal customer can be the one who has repeated purchases from your brand and are likely to come back for more. You may have spent $50 acquiring them, but by the time they have made several purchases from your store that are sales worth more than $250 so far, they definitely have a higher Customer Lifetime Value. Your loyal customers.
But that does not imply that your one-time customers are less valuable. You just need to implement proper strategies along with a proficient Ecommerce Development Company in India to improve that segment of customers’ CLTV instead. This holds true for basically all the customer segments of your E-commerce business.
Additionally, CLTV helps you to determine how much you should invest to drive more revenue from existing customers and evaluate if your current acquisition and customer retention strategy is designed for short-term gains or it is able to support sustainable growth.
Strategies To Increase Customer Lifetime Value
Attracting new customers towards your ecommerce business is very important, but at the same time increasing the lifetime value of your customers and developing the best ecommerce web design in India is what will actually move the needle in favour for your eCommerce business. Here are a few ways you can improve your CLTV.
1. Ensure a High-Quality Omni-Channel Customer Support-
Our experts at IndGlobal Digital – an award winning e-commerce web designing company in Bangalore say that Customer satisfaction and customer lifetime value are highly associated with each other. So, to improve CLV, you should invest time and effort into generating an effective customer support program. To accomplish this, you should provide omni-channel customer support that can include the following:
- Email support
- Phone support
- Social media support
Just remember, each support channel you offer should be high-quality. You can determine some of your ideal customer’s favorite means of communication and utilise those few channels. For example, if your business entertains seniors, then maybe it’s better to pick up a phone for customer support. But in case your business caters to Gen Z audiences, social media may be ideal.
Automating your customer support along with softwares like HubSpot and Drift are excellent options to provide quality support at a reasonable scale. Regardless of your company’s size or budget, there are several options to provide valuable customer support.
2. Carve up your customers based on their purchase behavior-
Every shopper is different and the way they choose to interact with your brand is different too. Their motivations will vary as well as how they engage with your brand during their lifetime.
You can achieve this by using an E-commerce analytics platform created with the best ecommerce service provider in India which brings all your marketing data onto one dashboard. Your analytics tool should help you create customer segments based on your customers’ purchase behavior. Some of the E-commerce customer segments are:
- First-time shoppers
- Big spenders
- Full-price customers
- Cart abandoners
- Discount shoppers
- Repeat shoppers
- High AOV customers and
- VIP and loyal customers
3. Create a customer account page –
Everyone is trying to make it easier for the shoppers to complete a purchase. The ease of making a purchase actually drives your users closer to your brand and takes them away from your competitors. Offering guest checkout is one of the useful strategies to get your online store visitors to complete a purchase.
Well when you made a first time purchase with Amazon. You had to sign up for an account. They made it simpler for you even for your future purchase. Right from saved addresses and your wish lists to a record of all your previous orders, it keeps all your data in one place.
And that is exactly the reason why you keep shopping with them.
In addition, an analytics platform also enables you to make more personalization of your campaigns, and significantly higher are the conversions that you get from them.
4. Establish a customer loyalty program-
By setting up a loyalty program, you’re actually enticing a customer to make more purchases from your brand in lieu of rewards that they are to avail of on their next purchase. It is more like offering your customers a reason to come back for making another purchase. It is pretty much similar to when you are offered an exclusive pre-launch coupon code and you wish to avail them right away!
Following is an example from Sephora that pushes customers to join their Beauty Insider program to avail the benefits:
5. Introduce a subscription model-
Based on the industry type your business service is in and the kinds of products you sell, setting up a relevant subscription model can boost your CLTV. It is almost like ensuring recurring revenue in favour of your business.
Additionally, you can also upsell and cross sell in your subscription model by introducing your new products to your customers. The more they explore, the more likely they can come back for more. Especially if the product becomes an essential part of their day-to-day affairs.
Let’s check an example of a subscription model from Huel, where they provide an additional discount to shoppers opting for it.
6. Address all the concerns related to post-purchase order anxiety upfront-
Do you know that more than 86% of buyers are actually willing to pay more for an improved customer experience? But just one bad experience leads to not only losing a valuable customer, but also 15 other people informed by them about it . This happens typically when the post-purchase anxiety creeps in.
Post-purchase anxiety occurs due to lack of visibility on the order status, when a consumer places an order and as a result starts to worry about it. They place continuous calls for the update or send emails to find their order. That’s where the business loses out on the purchase experience as the more worried your customer, the less likely they are to come back to your business. You can address this simply by setting up order tracking pages on E-commerce websites and by triggering automated status updates via email and SMS.
Follow the below example of an order tracking page:
7. Implement multi-channel marketing
Customers prefer multi-screen, multi-channel behavior these days.
Multi-channel marketing assists you to communicate with your customers across various channels thus maximizing your platform engagement. It also aids you in getting an understanding of your customers’ preferences related to the channels and their behavior as well on different channels.
Channels such as Email, SMS, WhatsApp & Web push help you engage your customers for several use-cases like cart abandonment, up-sell and cross sell, product recommendations and many more.
Facebook Messenger is another potential channel to engage with your customers. For example, you can reach out to your customers on Messenger to request them to share their ratings and review of a purchase that they made recently. The channel would make them feel valued, thus positively impacting your CLTV. Also you need to keep in mind that what you send to your first-time buyer should not be the same as how you’re reaching out to someone who has already made a few purchases from you. The first-time buyer can be requested to share more details or create a wishlist, but the existing buyer can be requested to sign up for your loyalty program.
8. Launch cross-sell and upsell campaigns both on-site and off-site-
When consumers visit your ecommerce store and start exploring your product ranges, sometimes what happens is that they are so distracted that they will just land on one particular page and leave in a few seconds which, in turn lowers the chances of improving your CLTV.
Ensure setting up cross-sell and upsell campaigns right from the beginning to introduce your customers to more products.
For example, displaying product recommendations on your online store will significantly help you make contextual suggestions to your visitors. This pushes them to explore more products, as well as increasing the dwell time and simultaneously makes them wish to interact with you, thereby increasing the chances of conversions.
Similarly, once a shopper makes a purchase, you can simply introduce the complementing products through an email.
The idea is to let the customers know that you want to add value to their lives and executing this strategy proactively will help to keep your customers engaged with your brand.
9. Run restyling campaigns
Have you ever browsed a product on any E-commerce store and then been followed by similar sort of sudden display ads across the web?
Retargeting and remarketing ads should be a vital part of your customer engagement and retention strategies right from the beginning. They should not be used just to recover abandoned carts, but also for your business to remain at the top of your customer’s mind.
10. Ask for customer feedback and valuable suggestions
Many times you can see brands focusing on making a shopper complete the purchase. But what happens post they purchase a particular item whether they like it or not or whether they are satisfied with its usability and so on. This requires collecting their feedback at every moment they purchase:
- At the point of order delivery by using scannable QR codes on the packaging
- Immediately after the order delivery through Email, SMS or a phone call
- After a few days from their order delivery via Email, SMS, or a phone call
11. Help customers make an informed and the right purchase decision-
In times when there appears competition on the high rise, one thing that is definitely going to make a customer want to buy more from a brand is the trust which cannot be just won by the biggest of discounts. It comes only when you help shoppers make an informed purchase decision.
Right from ensuring that your product pages include all the relevant information about an item till enabling live chat on your ecommerce site, this can be accomplished in numerous ways. The idea is to remain available to shoppers when they have a concern or a query and address them with utmost honesty.
When you help a consumer to make an informed purchase, they are more likely to enjoy the orders once delivered. The more they enjoy the purchases that they make, the more likely they are to come back, thereby increasing your CLTV.