How Customer Lifetime Value Can Make Your Digital Marketing Campaigns Success

How Customer Lifetime Value Can Make Your Digital Marketing Campaigns Success

Want to nail your digital marketing campaigns? If yes, use customer lifetime value to your digital marketing campaigns effectively.

When planning your annual digital marketing budget, it may be tempting to focus on new customer acquisition. However, this is where you may be making a rookie mistake. Yes, new business is important, but existing customers can be far more valuable. In fact, according to Bain, repeat customers spend 67% more on average than new customers.

Therefore, it can prove far more expensive to acquire new customers than simply nurturing existing ones and encouraging them to continue spending. So, how do you establish which customers to target with your marketing campaigns? This can be done by working out a valuable metric called Customer Lifetime Value.

1. What is Customer Lifetime Value (CLV)?

Put simply; it’s the measurement of profit your business makes from a single customer. It’s absolutely key in understanding your customers and helps you to work out how much it costs to acquire new customers vs the profit they bring in.


2. How do you calculate it?

This great infographic from KISSmetrics uses Starbucks as a case study to show the necessary steps to calculate CLV. It’s a simple equation that takes into account average order value, average purchases per week (or your preferred time scale) and value per week (month/year). Using this data, you can then work out your CLV and make the most of the metric for your online marketing efforts.

3. How do you apply it?

Once you have your metric, you need to apply it. Here’s how...

a. Segment your audience

Before you can get stuck into putting your CLV findings into action, you must first understand who your ‘good’ customers are. This will help you to establish how to target your digital marketing campaigns.


To do this, break down your audience into segments by looking at their average spending. Group them by separating the lower spenders from the high spenders. This will then help you to work out how to generate more from your high-spending customers.

b. Get engaging

Now you have your ‘high spenders’ segment; you need to shift your marketing focus to them. It’s no good firing out pop-up ads in a bit to acquire new customers who may only be ‘low spenders.’ It’s time to engage with your loyal customers who spend and have a much higher CLV.

Focus your efforts on the channels where your existing customers are already engaged, such as email marketing and social media. They are already engaged with your brand and far more likely to fall into the ‘high spender’ segment.

4. How to apply CLV to your digital marketing campaigns

Now you have calculated your CLV, segmented your customers and shifted your focus to existing customers in the ‘high spender’ category, you need to build a strategy. This will help to really focus your digital campaigns and ensure you achieve a high CLV.

To help, here’s how you can use your digital channels to target your campaigns more effectively.

a. Social Media

When you approach social media, think about relationships. The relationships you want to form with your loyal, high-spending customers. It’s shocking how many brands still take the one-way approach by blasting out messages and failing to engage. Audiences don’t want to be talked to anymore, and they want interaction.


Put yourself in your consumer’s shoes and think about what they’re most likely to respond to. Plenty of brands are nailing this by sharing content that users can interact with.

Bluff Works posted a picture of an island and asked Facebook users the following:

“If you were stranded on a deserted island and could only have one pair of pants, what would they be?

C’mon guys, this is a trick question.”

By asking a question, the clothing brand actively beckoned followers to interact - not a one-way pitch. It’s a great way to encourage engagement and is a proven way to boost interaction. In fact, KISSmetrics reported that questions on social media get 100% more engagement.

So, when planning a campaign on any social media platform, always think about interaction. Post polls, ask questions and use hashtags so loyal followers can really get involved.

b. Your website

This is the place where you have control when it comes to conversions. It’s also the place where you can really let yourself down if it’s not up to scratch.

Any digital campaign you run is probably going to point back to your website. So, when potential customers land there, it’s important that you’ve done everything you can to encourage a conversion.

You can do plenty of things to ensure the user journey on your website is top-notch. From having a blog to show authority to making sure your load speed is under three seconds. To help, here’s a handy article full of useful tips on how to turn your website into a money-maker.

c. Email

This old chestnut is still proving to be one of the most valuable marketing tools out there - especially when it comes to engaging with existing customers. However, it only really works when used right.

Relevance is key with email. Making your emails as tailored as possible to your target audience will prove way more valuable than sending blanket campaigns that will be ignored or deleted. You want the recipient to see real value in your email, whether it’s solving a problem they have, offering a discount on an item they’ve shown interest in or simply following up after a purchase they made to check everything is ok.

Emails to Interact with the Customers

Personalizing your emails in this way and showing that you genuinely care about the recipient will improve the results of any campaign. It’s also one of the best ways to make the most of your CLV, as you can actively target existing customers.


Calculating your CLV can really help you to spend your digital marketing budget in the right places. Making investments in customers who are already engaged with your brand can be far more rewarding than overspending on customer acquisition campaigns which may only generate very little.

Nurture the ‘high spending’ segment of your audience and show them the love they deserve. They are your business’s most valuable asset, and focusing your marketing efforts on them will prove more fruitful in the long run.

Ryan is an SEO Specialist at the Bradford based Digital Agency Harrison Mann. Being in the Digital Marketing field for 6 years now, he enjoys keeping up to date with the latest in all things digital and search.

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