Glad you're here! Enjoy this post.
8. Increasing Customer Lifetime Value
Increasing Customer Lifetime Value
When many business owners think about revenue, they think about short-term sales. However, the real money is made on the backend.
So if you want to win big over the long-haul, read on for a few suggestions that are sure to boost each customer’s lifetime value to your company.
#1. Give a World-Class Experience
One of the most valuable things you can do for your clients is provide them not just with a product, but with an experience.
That’s because at the end of the day, people want to feel special. And anything you can provide above and beyond your basic services will keep coming back for more.
Also known as “unreasonable hospitality” or creating “wow” moments, these experiences will linger in the minds of your clients for a very long time. It’s the kind of thing they share with their friends and family—the kind of things that sets your business apart.
Here are a few examples to get the creative juices flowing. Notice that each is simple and easy to provide. In other words, just as it is with your friends and family, it’s more the thought and consistency that counts.
- Stick to your word
- Staying true to your word in business means delivering what, where and when you say you will—and not making promises you can’t keep.
- Small gifts
- Small, unexpected gifts—discounts, gift cards, a small free product—are welcome surprises that are sure to wow your customers.
- Respond quickly and honestly
- A recent study showed that 45% of customers would abandon a purchase if their questions weren’t addressed by a business rapidly—so a quick response not only wows, but keeps customers around in the first place.
- Get to know customers
- People love being known and understood. When you take the time to learn about and build rapport with your customers you establish trust. It also puts you in a far better position to solve their pain points.
- Regularly check in
- Follow-ups are pretty commonplace in sales. But what’s not so common is checking in with your customers for no real reason other than to say hello and show you care.
- Empower your staff
- One of the best ways to create wow moments is to remain aware and responsive in the moment. And since each customer has their own unique story, personalized wow moments can make a huge impact. For the greatest effect, give your staff the power to make choices that go above and beyond for your clients. You’ll not only wow your customers but also give your workers agency and empowerment.
These are just some examples. And again, do what makes sense for your business—and keep it simple. The bottom line is helping your customers feel appreciated and valued by your company and staff.
#2. Offer Upsells
The moment of purchase is a powerful one.
At that point, the customer is already committed to doing business with you. As such, you’re often able to increase their purchase with an upsell.
Typical upsells promote more expensive products, bundles or package deals. And while not everyone will be interested in leveling up, many will. So don’t miss the opportunity to improve your bottom line by putting a system in place immediately.
#3. Move Customers into Higher-Margin Products
Depending on your products, you may have some that have higher margins than others.
If you have a client purchasing a low-margin product, see if you can move them into a higher-margin area of your business. You may also wish to create complementary products and services—with higher profit margins—that pair well with other offerings.
#4. Give Customers a Reason to Come Back
There are many ways you can encourage customers to come back. These may be related to the overall experience of doing business with your company, orto more practical reasons like yearly servicing.
How can you incentivize repeat visits from your current customers? Are there any services you can offer that need to be repeated? If so, be sure to have a system in place for letting your clients know.
#5. Fire Problem Customers
Customers are great, right? Well, maybe not all of them.
If you have a customer that is continually problematic, it may be best to drop them. These troublemakers can often suck the life out of your staff and work culture. And let’s face it, those resources should be saved for those who truly value your offerings.
So while it may be tough, sometimes it’s best to let people go—especially if their effect on your overall business culture is negative.
#6. Regularly Increase Pricing
One of the simplest ways to increase a customer’s lifetime value is to regularly raise your prices.
When raising prices, start gradually and measure results as you go. The perfect price lies somewhere between sales numbers and the average transaction price. It can take some experimenting to find this balance, but it’s well worth the effort.
Also, know that you’ll eventually max out. But, you may be surprised—as many are—to find you’re consistently undercharging for your services.
How Will You Increase Your Customer Lifetime Value?
Using the points above, take a moment to brainstorm potential ways for increasing the lifetime value of your customers. Once you have a few ideas, put those systems into place and prepare for the positive effects they have on your bottom line.
Your Step-by-Step Marketing Blueprint:
Presale: Reaching Cold Prospects
1. Your Marketing Budget Guidelines
The Sale: Converting Customers
7. Your Sales Conversion Strategy
Post Sale: Creating Raving Fans
