This article has been contributed by Dave Schneider.
We all know that keeping customers is better than acquiring new customers. After all, the probability of converting an existing customer again is as high as 70%, compared to just around 5% for new customers. Because of that, customer retention has become an essential part of running a business.
Unfortunately, keeping customers interested isn’t always easy. With fierce competition in most markets, today’s buyers have a lot of choice, so you need to form meaningful connections and exceed expectations every step of the way.
But how can you make the most of your current customers? And what are some actionable strategies to increase customer lifetime value (CLV)?
Let’s look at a few of the most effective approaches below.
1. Improve Your Website’s UX
One of the most critical factors that determine your CLV is the experience you can provide. Sure, the quality of the services and products plays a vital role, but the convenience of using your website and the ability to find what you need are also essential considerations.
This goes beyond having a mobile-responsive and fast website with convenient navigation. While they are essential factors, today’s user experience is just as much about your brand authenticity as it is about functionality.
People always have the option to buy from Amazon and other industry giants, so if they’re going to work with you and give you repeat business, you need to make sure your website tells your brand story.
That means the core message, the selection, the brand voice, and even the buying process have to be representative of how you want your brand to be perceived. Any disconnect will only increase the likelihood that people won’t come back as customers and will start looking at alternative options.
2. Encourage User-Generated Content
Engaging your audience is never easy. Many brands try to encourage their customers to share their experiences, but few can actually make the interactions authentic and relevant.
However, when executed well, user-generated content can become the driving force behind increasing your CLV.
The reason why user-generated content is so important is that it serves as much stronger social proof than anything you could claim as a brand.
When customers share their success stories, evaluate your products and talk about their overall experiences with your brand, it will always carry much more weight than the claims you make yourself, and that’s not surprising.
Brands don’t always tell the full story and can exaggerate their promises, but users will usually give much more authentic insights, which can help current customers make up their mind about your products.
You can even use a tribe platform to create an online environment where your customers can discuss your products and share opinions. Having such transparency will be very reassuring to people you’re selling to and will help you drive repeat sales as current customers continually discover new products that they like.
3. Make Product Recommendations More Relevant
One of the easiest ways brands can instantly increase their CLV is by making timely and personalized product recommendations. And yet, even though it sounds very straightforward, implementing an effective product recommendation process isn’t easy.
Image source: freshrelevance.com
For one thing, you can’t just list any products and expect people to be interested. In fact, many will feel annoyed by the fact that you’re suggesting something that doesn’t make sense in their situation.
But when you’re selling a lot of products, automating the process isn’t always easy. Not to mention that you also have to figure out how to present the recommendations in a way that aligns with your brand.
Image source: optinmonster.com
There are many advanced product recommendation solutions available today, many of which use artificial intelligence. Once you choose one to try out, track its performance and optimize your recommendations until your current customers start responding.
Once you fine-tune your approach, product recommendations can become the best sales tool at your disposal. Suggesting relevant products to current customers will often be more than enough to make the sale because the customers have already dealt with you and are much more likely to trust your brand.
4. Make New Customers Feel Welcome
Making the initial sale is hard. But following through on your promises once the sale is made can be just as tricky. Because of that, many companies struggle to keep customers coming back for more, as poor onboarding processes and overall post-purchase experiences leave them disappointed.
On the other hand, if you can ensure that your customers are satisfied with your products and services, you will have a much easier time converting them next time they need something, which can significantly increase your CLV numbers.
But how can you provide a better experience for your current customers? Well, that comes down to whether you can meet their expectations in terms of what you’re offering.
Customer happiness doesn’t just come down to how good your product is. In fact, in many cases, even the best product on the market can leave the customer disappointed if it doesn’t solve their problem.
Therefore, as a brand, you should focus your efforts on ensuring that
- customers choose the right product for their needs and
- once they buy it, they know exactly how to use it in their situation.
To make this happen, you should work on establishing a customer knowledge base that can offer insights about various aspects regarding your products. Whether it’s which products to choose in different situations, how to use them correctly, or even what to do if something isn’t working, you should strive to provide your customers with the answers they need before they start getting frustrated.
It’s also essential to be ready to step in and help whenever something does go wrong. Your customers should be able to reach your customer support staff in multiple ways and should be able to find quick answers when they’re facing a problem.
Chatbots can be very helpful for providing answers to general questions and directing customers to useful resources, especially when live support staff isn’t available.
Increasing customer lifetime value is one of the most important aspects of running a successful business today. Acquiring new customers can be expensive, so brands that want to grow need to focus their efforts on repeat sales, improving brand loyalty and finding new ways to help their customer base overcome obstacles.
By focusing on a seamless user experience, encouraging user-generated content and working to make current customers satisfied, you will be well on your way to gaining a reputation as a company that customers can trust and rely upon.
About the author: Dave Schneider is a serial entrepreneur who co-founded Shortlist, a marketing un-agency that serves as an outsourced dedicated marketing team, in 2018. He has also co-founded Less.churn, a churn reduction app, prior to selling it in 2018.
The post 4 Powerful Ways to Increase Customer Lifetime Value first appeared on JUST™ Creative.