Top 4 Strategies To Increase Your CLTV
As we mentioned last week, the Customer Lifetime Value is the overall profits a customer will make for you in their lifetime. This is an important metric to focus on as it determines the long term acquisition strategy and ultimately your success as a company.
There are many things you can do to focus on right now that will increase your CLTV:
- Increase the number of transactions
- Increase the size of the “basket”
- Up-sell items
- Decrease churn
Increase the Number of Transactions
To increase your overall profits per customer, you can increase your repeat customer rate. In other words, get your customers to buy from you, more frequently. This can be done through reminding your past customers to come back to your store through marketing strategies like Email and Facebook retargeting ads.
Increase the Size of the “Basket”
This strategy refers to increasing the amount of items your customer buys on every transaction. This can be done by offering products in packages (a shirt, pants and tie) or offering promotions on items that go well together (wine and cheese).
This refers to suggesting specific and relevant items to your customer, based on what is already in their basket. Let’s say your customer adds a laptop to the basket and heads to checkout. This can be your opportunity to recommend a leather laptop case, an extra charger, or a wireless mouse. You may also want to offer 25% or free shipping should you add in one of these items. The offer becomes enticing and an easy decision for the customer who doesn’t need to browse further for items he/she may need in the future.
Decrease Churn Rate
Churn rate refers to the percentage of customers who unsubscribe or leave your customer base in a specific time period. In the case of a retail store, this can be a customer who hasn’t visited your store in 6 months. Providing exceptional customer service through offering timely replies, handwritten notes to new customers, and trouble shooting problems with care are all ways to decrease overall churn rate. Coming across as a human being who empathizes and is positive will definitely leave an impression that will keep customers coming back. Once you have a customer, its easier to sell to them again, especially if their first experience went really well.
These are all strategies you can easily integrate into your store through changing the way you think about your customer’s lifetime value. Instead of thinking about the short term gains, think about the long term benefit that will ultimately grow your store and keep it profitable.
Do you employ any of these strategies? If so, which one(s) work for you? Do you try any others?