Customers are the lifeblood of your business. While many factors can contribute to your success, if you don’t have customers buying your product or service (over and over again!), you’re not going to last very long.
That’s why it’s so important to maximize the value of your most loyal customers
How?
We’ll show you four strategies, in particular, that are proven to work. Each of these has the potential to increase how much money your customers spend with you.
What is Customer Lifetime Value?
Customer Lifetime Value is sometimes referred to as Lifetime Value or Lifetime Customer Value. Generally speaking, it’s a measure of how much profit you gain from a single customer over that customer’s lifetime.
This one attribute is so vital that many companies try to specifically calculate CLV through a Customer Lifetime Value Model. The CLV formula looks at three factors:
- The amount of money a customer is expected to pay in a single purchase.
- The chances of that customer doing repeat business.
- The cost of acquiring that customer in the first place.
It should be noted that a Customer Lifetime Value formula isn’t the be-all, end-all way of calculating the true lifetime value of a customer. Other factors can play a role in determining what a customer will pay over the course of their lifetime.
It is, however, a good starting point, and figuring out ways to increase that value will go a long way toward helping you convert more customers.
There are some common strategies for doing this. You can increase the average order of each customer’s purchase, or increase the rate at which people purchase from you.
Those are all fine ideas (they answer the what), but they don’t exactly go into detail on the steps needed to accomplish it (the how).
So that’s what this article intends to do — show you how you can increase Customer Lifetime Value through some relatively easy methods.
1. Sell as Much as Possible Upfront
This first tip is the most important.
Taylor Holiday, the founder of Common Thread Collective (an agency that helps eCommerce brands), once told me that he’s seen many businesses die waiting to achieve “lifetime value” with their customers.
Return customers are great (and that’s really what we’re talking about here).
But “lifetime value” as an end-all metric isn’t going to help your business… and it might hurt your business.
Why?
Because the value isn’t immediate.
If you optimize for increasing the value of your customers over the 2-5 years that they stay with your company, that’s nice… but you don’t really have time to wait.
This is why you should sell as much as possible upfront with savvy upsells, cross sells, downsells, and order bumps — all within a single sales funnel…
That might seem like it’d overwhelm your new customers.
But the most successful sales funnels we’ve seen have 3 or more upsells/downsells/order bumps.
They maximize order value by offering a lot of products all at once and taking advantage of the psychological fact that when someone buys one thing… that’s when they’re most likely to buy more things.
(Timing matters!)
Want to see what this looks like in action?
Check out the sales funnel that Mike Tyson built on ClickFunnels — he’s got a whopping 4 upsells!
2. Provide Specific Value
Want to know the BIGGEST secret to getting your customers to buy from you again and again?
Give them really specific, actionable value.
What I mean is this…
If you sell them a course to improve their finances, make it as specific and easy for them as possible to take action (avoid general suggestions or statements). I’m talking about showing them exactly which investment accounts to open and how to open them, actionable tricks for paying off debt faster, and apps or software they can use to track their expenses.
Specific value is real value.
And that’s the stuff that not only gets people to buy… but makes them buy again in the future.
If you’re struggling to sell stuff and provide real value, try and make it more specific. Don’t sell a course to “improve your finances”, sell a course to “pay off all your debt in just 6 months” or “Buy your first home this year.”
3. Make it Easy
How easy is it for your customers to buy from you?
Do they like what you’re selling but find it a chore to actually go through your sales funnel?
As you can see below, a lot of the top reasons that people abandon an online purchase have to do with an incoherent experience…
Think for a moment about how customers buy your product.
How many steps are involved?
What information do they enter?
How many clicks does it take for them to buy from you?
That last question is particularly important. The fewer clicks from a customer to make a purchase, the better.
Think about ways that you can make that process simpler and more streamlined.
If purchasing something from you takes only a click or two, the customer will likely be more willing to shop with you in the future. If it’s a lengthy struggle, they might look elsewhere, even if they like your product.
With ClickFunnels, you get access to tons of high-converting sales funnel templates.
Click below to get a free trial.
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4. Make it Personal
In the marketing world, it’s common practice to segment your current and potential customers. Years ago, you would do this based on very general characteristics like age, sex, profession, etc.
In today’s world, however, that type of strategy isn’t enough.
Hyper-targeted marketing is the way to go, and that leads to personalizing your interactions with customers. This is the best method to engage in LTV marketing since customers respond more positively when they feel like a company knows them well.
But this level of personalization in your sales funnel must be taken to the next level. You can’t just slap a customer’s first name at the beginning of an email and call it good.
In this new wave of marketing, you should offer special deals and content that appeal specifically to the individual.
Give them recommendations based off of their past purchases.
Reach out to them on special dates (like a birthday or anniversary) so they know you’re thinking about them.
This is all part of the Pareto Principle, which states that 20% of customers give you 80% of your revenue.
Focus on making that 20% feel welcome and part of your brand, and the revenue will follow. Now imagine if you can increase that 20% even more.
This level of personalization encourages customers to continue to shop with you, resulting in more customer retention and an increase in customer lifetime value.
How do you do it?
ClickFunnels software gives you everything you need to build a thriving online business… and everything you need to create the type of personalized automations that make your marketing feel highly personal.
5. Keep Talking to Them
In today’s online world, interacting with your customers is easier than ever, particularly on social media.
Customers don’t have to wait weeks or days for a response to a question or a problem. Now you can respond almost instantly, answering their inquiries and providing solutions to issues.
This isn’t just a nice perk; in many cases, the customer now expects it. In fact, they now expect it in less than 60 minutes, according to one study.
Think of it as an extension of providing excellent customer service.
Consider the companies out there which have gained a solid reputation for providing great customer support. Chances are they are active on social media.
Lowe’s is just one example of this. They provide content that speaks directly to their customers.
A good company is always available and ready to lend an ear to whatever the customer has to say.
Seek to improve your communication, and you’ll solidify a customer’s loyalty to your brand.
The easiest way to do this is through consistent email marketing — send emails every day or every week to provide consistent value and stay top-of-mind.
You can use ClickFunnels to build an email list and stay in contact with your most important asset: your customers! Learn more about our email marketing features over here.
More Customer Value Awaits
These are, of course, only a few easy suggestions for increasing the overall value of customers over their lifetime.
Other methods include providing loyalty programs, signing up customers for an annual billing cycle, continuing to engage with marketing practices even after customer acquisition, and more.
But don’t overthink it.
Just get started.
You can find put all of the above tips into action with ClickFunnels.
Click the link below to get started!
Thank you so much for sharing this useful information about up-selling and cross-selling with us. Because cross-selling and up selling is the new part of your sales funnel. These both things are very helpful for any business according to seller point of view.
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