Are you maximizing the value of your customers and turning as many as possible into superfans?
Or are you spending an excessive amount of resources on customer acquisition and neglecting your existing ones?
If you answered “yes” to the latter, it’s time to shift your focus to customer lifetime value.
It’s the key to unlocking higher referral rates, stronger brand loyalty, and an uptick in retention.
If you get it right, you can increase your profits without relying solely on bringing in new business every single month and ultimately drive long-term success and sustainability.
Keep reading to find out how to increase customer lifetime value for ecommerce brands with four easy-to-implement strategies.
Customer Lifetime Value in ecommerce (also known as CLV, LTV, or CLTV) is a metric for measuring the total amount spent by a single customer on your products over their entire lifespan.
The higher the value, the better job your business is doing at retaining customers and encouraging repeat purchases.
If you can increase your customer lifetime value in ecommerce, you can spend fewer resources on customer acquisition while still growing your profits. But to do that, there needs to be a strong focus on improving customer satisfaction to ensure people stick around for the long haul.
To unlock the potential of customer lifetime value (CLV), ecommerce brands need to use strategies that encourage brand loyalty and engagement.
Here are four effective and practical ways to achieve this goal.
Developing an emotional connection with your customers is the first step to increasing your CLV.
That’s not a throwaway statement.
82% of customers with a high emotional engagement towards a brand will always buy from it, and these customers have a 306% higher CLV.
…But how do you develop your relationship and continue to nurture it?
With a well-structured loyalty program.
According to a Forrester study, loyalty program members spend 12-18% more annually than non-members.
However, offering $100 spent and calling it a day is not enough. To increase revenue, your rewards platform needs to go beyond “points for likes” and offer tangible, valuable rewards that resonate with your audience.
Perks like cashback, in-store credit, and exclusive access to product drops will go a long way in making customers feel appreciated.
These kickbacks have:
Let’s look at an example.
Lunchbox Packs, an anti-theft backpack brand, had a run-of-the-mill loyalty program, but it wasn’t delivering an exceptional experience.
To turn that around, the brand used TOKI to roll out a new loyalty program to include:
It’s led to more significant spending in their segment of superfans!
Personalization is the ace up your sleeve.
Customers demand tailored experiences, and if you can deliver, you’re setting your ecommerce business up for long-term success.
66% of consumers expect brands to understand their individual needs, and 70% say how well a brand understands their needs impacts their loyalty.
Leveraging and incentivizing zero-party data from your loyalty program can help you achieve that by customizing customer experiences based on preferences and behaviors.
You can ensure your customers feel valued and understood at every touchpoint through personalized product recommendations, targeted email campaigns, location-based push notifications, tailored promotions, product pages, and bundles.
It’s a winning recipe for increasing revenue and driving more repeat sales from an engaged audience.
And it works.
80% of customers are more likely to purchase from companies that offer personalized experiences.
Another way to increase customer lifetime value and boost your ecommerce customer success story is with an upselling and cross-selling strategy.
The goal is simple.
Offer complimentary or better products based on your customer’s purchase history.
It increases purchase frequency and average order value while expanding your product exposure and revenue.
Let’s look at an example.
You’re selling the latest iPhone on your ecommerce site. A natural cross-sell would be a protective case. An upsell would be encouraging add-ons like additional services (think iCare) or recommending a more expensive model with more storage.
But driving cross-sells with your products is only one strategy. With a paid loyalty program, you can increase cart size and create another recurring revenue stream.
There are two ways you can approach it:
With TOKI, you can integrate your membership with your Shopify store and make it an easy add-on option at checkout.
Referral programs capitalize on the trust your existing customers have in your brand.
But it’s not enough to remind users post-purchase about your “Give $10 Get $10” kickback.
You need to take an omnichannel approach to create a successful referral strategy that will maximize your customer lifetime value.
What does that mean?
Implementing Google and Apple referral passes.
With this feature, your customers can refer you on the spot anytime, anywhere, from their mobile phones and reap the rewards.
But the best part?
You unlock direct ecommerce sales channels with your superfans. Push notifications from the referral pass bypass busy inboxes and allow you to drive repeat sales with notifications based on proximity.
Use it to promote upcoming sales, online scavenger hunts, promotions, and more!
You made it.
You know how to increase customer lifetime value for ecommerce brands.
Embrace the power of CLV by creating a loyalty program, offering personalized experiences, an omnichannel referral program, and creating a tech stack to make cross-sells and upsells a no-brainer.
These CLV strategies can help you unlock higher retention rates, bump your revenue, and foster long-lasting customer loyalty.
To explore the full potential of implementing these techniques, partner up with TOKI and embrace the new era of customer retention and acquisition. Where loyalty is pointless, and the rewards are irresistible.