Understand the journey of each customer and measure the costs necessary for their transformation/retention. Obtain the revenue generated at each point of contact. Add up the customer’s purchases over a given period. Subtract Burundi Email List costs spent during the customer lifecycle. This information allows you to apply the following formula: Customer revenues – (Acquisition costs + Customer relationship costs). Madame Y spent € 18,600 on your business. But its purchasing cycle was much longer and required marketing and after-sales expenses of € 3,200. Madame Y’s CLV = € 15,400. Here it is slightly below average. A Criteo study reveals that only 34% of marketers surveyed are ” fully aware of the term and its connotations. ” Only 24% of them believe that their company effectively controls Customer Lifetime Value.
However, CLV remains a fundamental indicator. We explain why: CLV allows buyers to be segmented by value. 81% of marketers say CLV tracking boosts sales. By calculating CLV per buyer, you can improve your marketing campaigns without touching the budget. By strengthening communication with the most profitable customers, to increase their lifespan, and by sending incentive offers to buyers with reduced value, for example. The CLV helps manage the customer acquisition budget. Thanks to this indicator, you will quickly know the weight of your acquisition campaigns on the profits generated by customers. It happens that the cost of acquisition is higher than the profits generated during the first purchase. This anomaly hinders the profitability of your activity and must be corrected quickly. CLV strengthens customer loyalty.
5 tips to increase your Inbound Sales
Just as this metric gives you an idea of the acquisition cost/customer lifetime value ratio, it helps you measure your retention efforts. And you know the adage: it is often less expensive to retain a customer than to convince a prospect! The objective is to better manage the budget by readjusting, perhaps, customer relations actions to encourage buyers to spend more, for longer. CLV is a key indicator of the health of the company. The CLV provides you with essential data to establish a forecast over several months. You know the rate of growth of your business and the potential benefits of the next few months or even years. Valuable information to steer your future investments. CLV promotes repeat sales. Encouraging repurchases is the sinews of war for many companies. To be profitable, they rely on a high renewal rate of their consumers.
This is the case in the technology, catering, or fashion sectors, for example. With the CLV, these organizations check the relevance of their strategies, in achieving this objective of constant renewal. For a new customer, it decreases significantly and is between 5 and 20%. And that’s not all! Existing customers are 50% more likely to try your company’s new product. They are also more inclined to spend more. So, you might as well put your efforts into increasing CLV, right? Here are 5 tips to achieve this: Leverage first-party data. A little reminder, if necessary: first-party data refers to information collected directly by your company, on customers and prospects. This concerns declarative information (first name, last name, emails, position held, etc.) and behavioral information (actions carried out on the website or the application).
Want to take action now?
This data is important for improving content personalization and recommendations, activating different audiences, and refining upselling and cross-selling strategies. They also help you improve the user experience. However, a personalized user experience dramatically increases revenue and added value. To increase your CLV, consider improving the collection of this data, as well as its accuracy. The more you know about prospects and customers, the more relevant your campaigns will be. Take stock regularly with your customers. Even if they don’t ask for help directly, sometimes your customers have difficulty with your product or service. By making regular contact with them, you can anticipate any dissatisfaction while improving customer relations. To do this, you can: Calling your best customers for news: an effective strategy in B2B, where close relationships are particularly appreciated. Launch satisfaction surveys by email.
Publish surveys on social networks. Send tutorials and ideas for use by email (but also publish them on social networks) to support your customers on a daily basis. Example of a tutorial to improve your customer lifetime value. On its LinkedIn page, Trello regularly publishes mini-tutorials on the features and new features of the tool. This allows its users to better use it and possibly ask their questions. Improve the value of the average basket There are several techniques for increasing the average order value. By encouraging your customers to upsell or cross-selling, you will inevitably improve Customer Lifetime Value. Some good practices to apply: Add personalized product recommendations to the site, based on customer behavior. Send newsletters containing product or service recommendations related to the customer’s purchasing or browsing history.