James Canington / 7 Mins Read
Updated: February 21, 2023
Know how you are supposed to increase your profits and grow your business by increasing your existing customers’ lifetime value. Here are 10 strategies to follow
Going through a renowned newspaper during my coffee revealed to me an interesting truth about the business world.
The content under one headline said, “According to an analysis, 50% of the businesses in the US have to shut down within five years of their operations; out of those 50%, half of the businesses fail to last even a year.
This is around 350,000 US-based businesses that shut down due to low profits.” While the stats were bleak, the newspaper had an ironic headline right next to it.
The headline was about Elon Musk, the owner of Tesla and SpaceX, who overtook Jeff Bezos, the owner of Amazon, as the richest man on the planet.
The shares of Tesla peaked on that Thursday, which took the company’s net worth to over 700 billion, which raised Elon Musk’s total equity to a grand amount of 185$ billion.
To put things in perspective, Qatar, Hungary, and Algeria have a GDP of 147 billion each; These stats only tell how a business can take a man's place, but wait!
Not all enterprises bring loads of fortune, as not long ago, we discussed how more than 350,000 individuals lost their savings trying to succeed in the business world.
The Secrets of a Successful Business
In discussion with the head of a business corporation, I got an opportunity to ask him: What is the secret behind the success of his businesses?
His answer was interesting; he said that before you begin making a product, try selling the product; business is not about producing the finest product but about attracting the finest customer.
You can make the best product, but it will end up as a failure if none is willing to pay for it. On the other hand, you can produce a product that no one needs, but your business will never stop growing if you are good at convincing them.
The Two Types Of Customers
A business is likely to succeed if it can make sales, as sales are likely to lead to profit, which is the main aim of a business’s operations.
While we emphasize making sales, we need to differentiate between the customers we need to focus the most on.
There are two types of customers that would purchase a product: the first one makes the purchase for the first time, while the second one is an old customer.
What do you think is the better of the two? While a good proportion of business analytics agree upon the latter being the better, the business heads have failed to realize the importance of retaining an older customer as the stats have identified that 44% of businesses spend more money on acquiring new customers while only 16% would make efforts at retaining the older customers.
Customer Lifetime Value is an important concept highlighting older customers' importance.
In simple words, customer lifetime value considers the amount of money that a customer would contribute to the profit of a business over time; they are connected to a business.
The greater the CLV, the better it is for business. It is always more profitable to find 1000 customers that pay you 5$ each week of the month for a year than to acquire 48000 different customers that would purchase your product over a year.
According to research, finding a new customer may cost between 5 to 25 times more than retaining an older one.
Hence, today we shall share with you ten key strategies you must abide by to raise your customer’s lifetime value and earn more revenue from older customers.
According to a stat, 55% of the customers would only switch from their brand to another in cases of urgency, and only 30% of them would keep on with the new brand while the remaining would switch back.
The customer is the king, and a king doesn’t like thrones in his path. Having a difficult onboarding process creates difficulties for customers to repurchase or renew your product or service, which causes them to switch to another product.
One essential strategy to raise your customer lifetime value is by easing down your onboarding process so the customer doesn’t have to think twice before buying your product.
Although the measures to improve the onboarding process vary from industry to industry, some basic ideas include introducing video tutorials and walk-through guides that support customers in purchasing.
“It is not your customer’s job to remember you. It is your obligation and responsibility to make sure that they don’t have a chance to forget you”-Patricia Fripps.
Keeping customers engaged is an important aspect of retaining customers and is directly connected to raising the profitability of a business over time.
Once a customer makes a purchase, you should stay connected to them through emails that educate the customer about numerous ways that provide a solution to their pain.
Although email marketing is one of the widely used methods, it is often done the wrong way. The emails sent aren’t personalized but rather sales, which just end in the junk section of one’s mailing list.
To keep your customer engaged, you need to develop value-packed content that answers customers’ questions regarding your product.
The first thing that a business should do is to ensure that a customer isn’t lost.
According to research, 33% of customers would never purchase a product from a business that has a low-customer service.
A business is about building a loyal relationship with your customer that keeps them committed to your business, whereas switching is nothing but “cheating.” A relationship requires amazing support.
So do your customers; make sure that your customers don’t feel alone after purchasing your product.
Some ways to improve your customer service is by offering them 24/7 support and instant responses to their queries. You can do this by using social media, as this is the best way for your customers to reach you.
Another great way to keep your customer loyal to your brand is by identifying their problems or pain points and bringing their solutions.
The pain points of customers are diverse. It varies from complicated fees to after-sales support. Thus, you would need to identify the problems that your customers are facing.
Identifying your customer problems is challenging; however, an effective way to find them is through market research & online surveys.
The study & surveys focus on detailed responses from customers where they have the opportunity to explain their problems in full.
After you have identified the customer's pain point, it's time to devise a plan to resolve it.
The solutions to the pain points would vary depending on the solutions that your company can offer.
Back in 2020, I bought a smartphone from a leading eCommerce store, but unfortunately, when it arrived, I found that the LCD of the smartphone was damaged.
I immediately launched a complaint on their portal, and within a few seconds, they contacted me. On the same day, their representative reached out to my home and replaced the product.
I didn't have to call them multiple times to get the product returned. It was a single complaint, and I got the product replaced without spending a single cent. Their incredible customer engagement turned me into their lifelong customer.
Customer satisfaction can be a game-changer for your business. If your customers are delighted with your products or services, it will lead to more repeat customers and revenue growth.
After a satisfactory customer experience, 50 percent of people use the company more frequently. Now, ensure to put your customers at the top of the list to enjoy the benefits.
In today's highly competitive business environment, customer service significantly increases a customer's lifetime value.
If your product or services are exceptional, but the customer support services are below average, you will most likely lose your customers.
According to a recent survey, 40% of customers are expected to switch their brands after a single instance of poor customer service.
Besides it, high-end customer services improve Public Persona and build a strong reputation for your brand.
Here are a few recommendations to offer excellent customer service to your clients.
According to The Telegraph, "The rise of millennials and globalization means businesses need to operate 24 hours globally to remain competitive".
Companies should ensure that their customers aren't put on hold for any reason.
Social media is a great tool to interact with your customers & provide them with an immediate response. On social media platforms, customers expect a fast response from businesses.
The latest survey reports that approximately 84% of consumers expect a response within 24 hours on Facebook. Things are even tenser on Twitter, as the consumers look for a reply within 45-60 minutes.
If you cannot respond to them earlier, your business is likely to lose its reputation and clients.
There's nothing wrong with saying that Customer Feedback is highly valuable for improving your product or service.
Feedback helps to gather the flaws of the product that shall be used to improve or enhance the product or service and retain your customers.
However collecting feedback is a bit tricky, but here are some tips that will help you collect feedback. Here are a few great tools you can use to get feedback from your customers.
Crowd Signal or Survey Monkey: Both of the platforms are excellent options for conducting surveys. They are pretty easy to use, with numerous useful features.
Starting a blog and monitoring the comments can be another way to gauge the temperature of your audience.
Charts Ninja or Infogram: Both let you upload spreadsheets and create cool charts or infographics you can share on your blog or social channels.
Customer Success Software offers a unified, 360-degree view of all your customer data, making it easier to spot potential problems resulting in customer defection, inactive customers, and profit stagnation.
Customer success software helps businesses to avoid losing customers before they walk away. This software type can help you reduce customer churn rate, increase customer engagement and retention, and identify upsell and cross-sell opportunities.
Offering extra services is a great tactic to keep your customers engaged with your brand. If you have a product that your frequent or regular customers haven't tried, send it to them.
If you have a premium service, give them the upgrade for free. The actual cost for it would be nowhere near the influence it will have on your customer.
Your customers will have on their friends, family, colleagues, and social followers. Thus, you wouldn't only retain your client but also find more people.
If You Are Offering A High-Quality Product, You Are Most Likely To Retain Your Costumes. A quality product creates customer loyalty that generates increased leads.
Set goals for your company and make them public.
When consumers find a product they trust, they make repeat purchases and recommend the product or service to others.
Consider Apple's success; they sold more than 217 Million iPhones in 2018. According to Apple's CEO, Tim Cook, Apple has 1.4 billion active devices, with 900 million of those being iPhones.
Apple wouldn't have that kind of success if people didn't love the quality, even though their products are considerably more expensive than other options. If you want to retain your consumers, ensure it is of the highest quality.
The bottom line is that it is all about customer satisfaction. You should provide what they need and provide maximum convenience as much as possible.
And this brings us to the end of the blog; I hope you people learned some key tips about raising customer value and can implement them in your business to earn the best revenue.
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James Canington is the Director of Marketing, SEO Expert, and Digital Marketer for Ardent Creative. With over 13 years of experience in digital marketing, James is passionate about content, automation, and using software to increase growth and efficiency. James lives in Fort Worth, Texas, and writes about How to Start a Blog and creating successful businesses that make money online at his site, GoQuickr.com.
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