Customer lifetime value in e-Commerce is an essential index of business performance. So how can businesses optimize this value?
Why is customer lifetime value in e-commerce important?
Customer Lifetime Value is a significant index in e-Commerce as it helps measure the gross profit and success overtime of the business. In addition, CLV provides practical insights into customer retention strategies. Businesses can constantly find new customers, but it is costly and the profits are often difficult to predict. Meanwhile, suppose businesses can retain many old customers and have a high repurchase rate, which means high CLV. In that case businesses can know how to allocate budget to a specific channel or market. A steady increase in average CLV indicates that retention and upselling efforts are succeeding and impact on a customer’s chances of returning
Methods to Maximise Customer Lifetime Value
Here are a few ways to drive lasting value while building meaningful customer relationships.
Retain customers longer
Customer retention is about adding value to the customers through the brand. So the business’s marketing should inform, educate, inspire, and relieve, rather than selling directly.
Special care for loyal customers, accordingly, businesses should email customers with information and different ways of purchasing products for more effective use. Segment customers by interest, purchase history, and customize offers to reach them.
Encourage customers to buy more often
In a large market, it is challenging to retain customers and remind them of the brand every time they purchase. Therefore, one of the ways to encourage customers to come back and repurchase is to build a good relationship with them. Businesses can use many marketing channels, such as social media or email marketing, then send product recommendations based on their purchase history. Or when customers visit the website but leave without buying anything, businesses should send an email to remind them if they want to buy the product. Coupons for the next order are also great to speed up the purchase process.
Drive larger order value
Selling by package/combo is a way to increase order value. Find out and analyze the products that customers often buy together, then come up with suitable combos and suggestions at the product page or check-out section.
Another way is to offer gifts for orders over a specific value. Finally, businesses should categorize products by using purpose or occasion to help customers discover a variety of free accessories and items to make their lives easier.
Above are some ways to increase customer lifetime value in e-commerce. Depending on the product, service, and business situation, businesses should choose the best way to maximize this index and achieve business efficiency!