Three Simple Steps To Build Customer Lifetime Value (CLV)
Customers’ are the ultimate decision makers in determining the fate of your business. Do you agree with this statement? Do you love your customers’? How much? Does your business take good care of your customers’ needs, interests, preferences, and tastes?
Customers’ are imperative in building a successful business. Every business needs customers’ to generate income. They play a key role in determining the success of your business. But how can a business win the trust and confidence of its customers’? It’s not an easy job for businesses to win the customer loyalty. It takes a lot of time, strategic work, and dedication to win the hearts of your customers’.
For instance, if your business is aiming to attract and retain its customer’s for a lifetime and wishes to boost the customer lifetime value, and then your business needs to take an excellent care of its customers’. A business should provide its customers’ with quality products and/or services, deliver superior customer service, build positive customer relationships beyond the purchase, earn customer loyalty continuously, identify the most profitable customer groups in your community, offer them special festive offers and discount coupons, up-sell and cross-sell products at every opportunity, and so on.
In this technology-driven age, customers’ are becoming more powerful than ever before. Therefore, businesses need to provide its customers with positive experiences. A positive customer shares his/her experiences, as well as recommends company products and/or services to their friends and family members, which can lead to new customers’ and an overall improvement in customer lifetime value. All at zero cost.
What is the Customer Lifetime Value (CLV)?
It is defined as the total amount of value a customer contributes to your business over the period of time. It starts with initial customer purchase, goes beyond repeat purchases, and ends with the moment of churn.
Strategies to Build Customer Lifetime Value (CLV)
- Conduct a Customer Lifetime Value Analysis
It is imperative for businesses to have a clear understanding of its customer database. You can use CRM system to identify and group customers’ into various categories.
At first, use your business CRM solution to figure out: new customers’, existing customers’, potential key customers’ who has done repeated purchases, one-time purchase customers’, and the customers’ who are not so profitable to keep. This information is vital to devise effective customer-focused strategies.
- Segment Customer Data to Create a Retention Plan
Once you have completed the customer lifetime value (CLV) analysis, you can then use that data to segment customers’ into different targeted groups. For example: The potential key customers’ are categorized under one targeted group, whereas the one-time purchase customers’ are grouped under a different category.
Classifying customers’ into different targeted groups will help a company devise an effective customer retention plan, as well as build deeper customer relationships. For example: Using the segmentation data, businesses can send up-coming product details as well as free product trial versions to the specific audience group whereas for the one-time purchase groups, you can send exclusive discount coupons, relevant products, as well as personally follow-up them on the phone.
- Send the Right Communications to the Right Customers’
At the very beginning, relevant and anticipated communications are imperative for businesses to win the trust, confidence, and customer loyalty as well as to build the strong long-term customer relationships. You can use CRM software to identify the customer behavior, spending habits, past purchases, etc. and automatically trigger your communications based on the analysis obtained. Sending individualized and personalized marketing messages which will ultimately result in developing a fruitful customer relationship is highly impactful for businesses.
Utilize your CRM system effectively to build positive customer experiences as well as offer excellent customer services, which can ultimately result in increasing the overall lifetime value of your customers’.
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