Customer Lifetime Value – How can I improve it?

Customer Lifetime Value is an incredibly important and useful tool when trying to gauge your businesses present and future success.

You may have now come to a point where you know how to calculate your Customer Lifetime Value (and if not, then perhaps you need to first read our blog ‘Customer Lifetime Value – What is it & how to calculate?’ before you continue reading).

Now you want to know how you can improve your existing relationships with your customers, to ensure that you’re constantly trying to improve that ‘value point’.

There are a few ways of going about this, all of which are ideas that you can implement into your business depending on which ones you feel suit you best.

Customer Experience

You need to make sure that the time your customers spend on your website is an enjoyable time. The below are some of our suggestions to ensure this:

• Fast loading speeds
• Copy that is on point and in line with brand values
• Good and engaging design fitting your brand and target audience
• Easy to navigate
• Accessible to all online users
• No bugs or glitches (You can’t imagine how often we see stores where the ‘add to cart’ button isn’t working!)
• Being there to answer your customers questions (Using Conversational Commerce in form of Potential Chat Bot/Live Chat functions or even a FAQ section)

The best way of ensuring that all of these things are up and running correctly on your website is by investing time (and yes, money) into them.

Let’s start at the top of those bullet points shall we?

Faster loading speeds can be achieved by working on the front-end of your website on a regular basis. Keep things as simple as possible yet as functional as possible by using a fast host, using images in the appropriate sizes, reducing the number of HTTP requests and generally just keeping an eye on loading speed issues to work on them as soon as they pop up.

Ensure that your copy (website text) is mistake-free and catchy! Use clever slogans or come up with three or four terms that you feel really represent your business and your brand voice and then constantly hammer those in. Include them everywhere so that eventually when customers think of your brand, they can’t help but remember those exact three words because they read them repeatedly. It will be a subconscious thing that they do, but effective nonetheless.

Good and engaging design fitting your brand and target audience. Create a website that suits you! Use colors and images that suit your brand and evoke the emotions that you want your brand to convey to customers. Whether you are a young start-up that specializes in IT and want a really modern looking site, or you’re a vintage art dealer who sells beautiful old murals and wants a website that suits a certain period in history – then that’s what you need to create.

For inspiration on websites that are really doing the most in terms of design, take a look at a blog that we have on our website, ‘10 Exemplary Headless Online Shopping Experiences’. They’re all rather modern looking, so they may not suit your brand aesthetic perfectly, but their functions and capabilities are something to look up to regardless! It’s less important that they’re headless, which we will expand on in a little bit if you aren’t familiar with the term ‘headless’, but more that they’re just visually appealing. They are truly in line with what they stand for as companies.

Easy to navigate. Your website needs to be easy to peruse through. There is nothing more frustrating than wanting to get to know a company better and therefore going on to their website but having them make it difficult for you to find things. The dropdown menu needs to be easy to find, the ‘shopping process’ must be logically set up on your website, filters need to be in place (eg. if you have a clothing brand this will save your customers a lot of time) and you have to have simple shortcuts that take you through to the most viewed pages of your website.

Make your website accessible to all online users. Make sure that the content you have on your website is easily available and that its functions can be used by every online user. It is vital to create your website in the best way possible to make sure that you reduce any tech barriers that may prevent online visitors from using your website or visiting your online shop.

For more information on this, be sure to take a read through our blog post ‘Accessibility on the Internet’.

No bugs or glitches are allowed. Fine, we all know that mistakes can happen, sometimes glitches can appear even though you’ve worked incredibly hard to avoid them. The best thing to avoid glitches is by checking your website performance regularly. Of course you try to keep errors to a minimum, but there will always be small things that don't work as intended. In these cases it's important to judge correctly, whether they are an actual issue (buy button not working in x% of cases) or just something that should be taken care of sometime (‘About us’ page is broken).

You will be able to see on your E-Commerce platform when you are due for an update (oftentimes these actually happen automatically if you have purchased a standard theme on Shopify or BigCommerce or Magento etc.). The most important thing is to make sure that your products can be viewed and added to cart easily. Furthermore, ensuring that your checkout process is working is also critical. It’s not all about sales, that’s also not what we’re trying to get at, but online customers will probably feel more frustrated when they are trying to purchase something in time for a birthday than if your ‘About Us’ section isn’t visible for some reason.

Conversational Commerce is the way of the present and the future. Customers want answers and they want them now. A really nifty way of incorporating this is by offering a Live Chat or Chat Bot function to your website. This can come at a cost as logistics and coding for this are rather technical. However, it would save on personnel eventually, especially for those basic questions that are often asked and can be answered by a bot.

Which takes us into the FAQ section of your website. If you’re not at the stage of being able to invest in a Live Chat function, either because you feel like it doesn’t suit your brand, or it’s too much of a financial and time invested commitment, then have a FAQ section. Here you can list all the usual questions that your customers get in touch with, and have readily prepared answers for them. This allows you to save time replying to the same emails, but also gives your customers more time to shop as their questions will be answered immediately, instead of them having to wait for your email reply.

Up-& Cross-Selling

Firstly, what’s the difference?

Upselling is when you will try to sell a more premium or higher priced product to your customer. So instead of them buying the white sneaker, you recommend them to buy the limited edition white sneaker that has a signature on it by Michael Jordan, for example.

Cross-selling is when you suggest that your customer buys more products. So instead of them only buying the white sneaker, you could offer them the opportunity of buying some funky coloured shoe laces to go with their new sneakers, or perhaps a rain protection spray to protect the leather from getting wet and damaged.

So Upselling is essentially an upgrade to an existing purchase, whereas cross-selling is when you receive additional purchases.

Why is this important for your CLV calculation?

The higher the purchase amount, the higher the average order value, which in turn contributes to a higher customer lifetime value.

Good Customer Service

This one seems obvious and yet somehow companies still manage to get it wrong.

It’s hard to please everyone. Each client is unique in their needs and expectations. You as a company need to be extremely strict when it comes to the process you want to incorporate with customer communication.

A great start is consistency. Create a guideline page of general answers to enquiries and complaints so that each of your employees offer the same kind of answer and tone when communicating with customers.

Another good start is speed. Ensure that you answer your clients in a timely manner. Should the inquiry be very time-consuming, there is nothing wrong with sending a short reply within 48hrs that says, ‘Thank you for getting in touch, we’re busy working on your email now, we will be in touch before the end of the week’. This allows you to have more time to answer and gives your customer peace of mind that their issue is being worked on and not just ignored.

Useful information. Support agents should have easy access to information about the customer and the customer's requests. This is especially useful when it comes to orders, because a lot of customer support requests will be around order information (what shipping address did I enter, when will the parcel arrive, can I still add an item to the order etc.) so regardless where the customer asks (live chat, support, social media), the support team should be able to look at this info quickly to be able to support them.

Be kind. Yes, it’s business, but that doesn’t mean you cannot be accommodating. Occasionally, you will need to be flexible. This is especially apparent when it comes to shipping issues. It’s a bit of a random thing to bring up but have you noticed how most retail shop’s reviews tend to get higher reviews when they’re accommodating with shipping and returns? Ensure that you have a flexible and cost-savvy scheme set in place when it comes to shipping and returns. Or if a client has accidentally entered the wrong postcode for a delivery, and you still have the time to change it with your courier free of charge, don’t charge your customer for this just because on your website it states ‘All delivery changes will be charged’. Be thoughtful and maybe cut them some slack too. A little bit of slack can go a long way.

Email Marketing

Do not underestimate the value of email marketing.

As a business, you are constantly trying to improve customer relationships and increase engagement. The best way to do this is by creating positive and informative conversation with your customers.

Send out emails that keep your customers in the loop with new arrivals, sales, limited edition catalogs or exclusive deals. This will create interaction with your customers and keep them informed with what you’re up to. You want to always ensure that anything you’re sending to customers actually helps them. Sales and exclusive deals would be something that they’re interested in so be sure to shout about these things.

Another nifty email tool is the famous ‘newsletter’ which you can send out on a weekly, monthly or ‘every time you have a new production’ rotation. The time intervals are completely up to you. It can take some time and brain power to get a newsletter up and running but it’s worth it as it allows you to be in contact with all the customers who subscribed to your newsletter.

The best would be if you were able to reach a point where you were able to bring in personalization. So if you were able to cater to each of your subscriber's personal interests by sending them information and products that are tailored to their order history, for example. You can personalize a store by showing products that cater to the interests and buying preferences of your customers, too.This is a really exciting avenue that can truly transcend your business, so we will be posting a blog dedicated to the importance of personalization soon! It’s too important to attempt to squish in here, but you get the gist of what we’re starting to say.

Loyalty Programs & Subscriptions

Get creative with these!

The world can truly be your oyster when it comes to creating a loyalty program and subscription setting for content that is engaging, exciting, useful and informative.

Both of these ideas allow for support from repeat customers. It also gives you a general number for assured sales that month if you have a set number of customers who have signed up for your monthly subscription send out box. Customers love convenience, and they love receiving goodies that they can look forward to on a recurring basis.

For more information on subscriptions, be sure to keep your eyes peeled for our upcoming blog on this matter, ‘Subscriptions Done Right’. Coming soon!

Loyalty programs are one of the best ways to keep your customers interested in your business and retain them as customers. Use a program like this to offer special deals for your loyal customers (fans of your business). These special deals can come in the form of discounts, gift cards, cash back etc.

Conclusion

Improving your CLV should be a lifetime pursuit. You really want to work toward understanding your customers' behaviors as best you can so that you can turn them into what you intend them to be, which is a lifetime fan of your business. The more you show care for your customers and the more time you invest in understanding and marketing to them directly, the higher your chances are of retaining them as customers.

We hope that this blog has helped you understand how to improve your CLV and if you have any more questions, please feel free to contact us through our website or send us an email on hello@especial.digital

ADDITIONAL TIP

We know these are a lot of ideas for features and it will probably take a lot of time and resources to implement them, if you don't already have them on your store. There might be a way to speed things up: by creating a website that is "Headless". This approach would mean a big investment (in terms of time and budget) yet would allow you to be more effective and flexible, when you want to add new features to your website.

What exactly does this mean?

Going headless means that you are decoupling the front-end of your website with your back-end. This means that they can continue to run parallel to one another but are not dependent on one another. The benefits of this is that the front-end, which is the only part that your online visitors see, can be a sleek, modern, fast, highly functional and tech-savvy piece of tech. Your back-end, which is your server and is often rather bulky and tends to slow things down, will no longer hinder the progress and speed of your website, as you’ll have essentially divorced these two parties in one swift ax-like movement.

There are not many tech companies out there who can do headless well. We are one of the few who have a genuine interest, passion, and knack for helping companies be more successful by going headless. We’d never suggest going headless, if it’s not the correct step for your business. Sometimes staying with a standard E-Commerce theme is the best for your business in the early stages, which is something we would also recommend. However, if you are looking to go headless or if you’re simply toying with the idea, why not schedule a discovery call with us? Pop us an email on hello@especial.digital or contact us through our website, and we’d be happy to help.

For a more detailed explanation of going headless, read our blog ‘Headless CMS – What is it? A short and sweet explanation’ here.