What is Customer Lifetime Value (CLV)?
Customer lifetime value (CLV) in marketing is a forecast of the net profit that is ascribed to the complete future relationship with a client or customer. This model of prediction can vary in levels of accuracy and sophistication. It can be seen as one of the most pivotal metrics for assessing any growing business. By gaging the CLV in relation to cost of customer acquisition (CAC), enterprises are handed the ability to calculate how long it takes to regain the investment needed to earn a new client or customer.
How to calculate Customer Lifetime Value
To calculate customer lifetime value, you will need to first of all calculate the average purchase value, and after that, multiply that value by the average purchase frequency rate in order to determine the customer value. Once the average customer lifespan is calculated, you can go ahead and multiply that by the customer value to determine the customer lifespan value.
Tips for increasing Customer Lifespan Values
To enhance sales and build customer lifetime value, it is important that you maintain good communication with your customers on regular basis. Communication is key to building a commanding brand, and it maintaining a sound relationship with customers over time that will lead to brand advocacy and brand loyalty.
Email marketing is a perfect tool for communication that will in turn lead to increased Customer lifespan value.
You can go as far as sending campaigns on customer’s anniversaries and birthdays with special offers and discounts. Social media can also be leveraged to communicate with customers.
Feature your fans in your content
Embed posts made by your fans who have shared your content or spoken something remarkable about your service or brand on social media to those following them. Let them be put in a spotlight and make them aware how grateful you are to them.
This will make them one of your most treasured marketing assets and they will make your brand a priority.
Provide an awesome Customer Service
Quality service is an important investment to facilitate the growth of your business and enhance conservation of your customers. In the case where your service is below expectation, customers will go to your competitors. Research has revealed that one-third of customers will likely change brand after a single occasion of poor customer service.
Excellence customer service will yield an excellent customer experience. This will in-turn increase the likelihood of your current customers becoming faithful long-term clients. Here’s how Creating a high converting opt in page for your brand business.
Constant Social Media Monitoring
When consumers reach out on social media, be it drop a complaints or to make inquiries, they are doing it due to the need for a rapid response.
If you as a service provider or a business person do not get a response in time, chances are that the user will express their dissatisfaction by sharing their experience with your brand to acquaintances on social media platforms.
You do not expect your previous consumers to constantly patronize your brand when you are not making any effort to re-engage them. The task of re-engaging your customers can be done via email remarketing. Send targeted messages to customers who have not patronized you for some time or those who have not opened your promotional emails or newsletter email for months. Make an offer that is irresistible so that they can return to you and purchase again.
Enhancing customer lifetime value is very important and it depends on you being able to draw out both short-term tactics and long-term strategies. If you place value on customers, I assure you that there will be a notable growth in your revenue.