In the world of eCommerce, there are several ways to measure and evaluate your business. Visitors, bounce rates, CTRs, conversion rates, and micro-conversion rates are all relevant metrics to track.
However, there is one metric that greatly overshadows the others in value - Customer Lifetime Value.
In this blog, we will read more about LTV and engaging methods to improve it.
What is LTV?
The simplest customer lifetime value definition – it’s a metric that shows how much net profit your company can make of one customer over time.
A high LTV implies that each user drives more revenue for your company. Since each customer is becoming more important, the business can afford to invest more on attracting new customers and retaining current ones.
According to Marketing Metrics, the probability of converting a new user is 5-20%, but the rate of conversion to an existing customer is 60-70%. So if you want to increase your business' profit margins, you should start by focusing on returning customers — increasing their lifetime value. But how?
1. Leverage Gamification
81% of consumers say they expect businesses to both understand them and know how and when the right time to approach them is. 77% of consumers have apparently spent more money on or recommended a brand that has offered a personalized service or a special experience.
If you want to increase customer lifetime value, start working on personalizing your customer experience during their journey. Use Gamification to personalize all interactions with your users through your app. This can be discounts, rewards, nudges, activities to complete and more.
Increase curiosity and create highly targeted campaigns making it difficult for them to ignore. In-app nudges for a certain user segment increases conversion rate and can also easily convince users to switch to a paid-plan.
2. Establish a Relationship
You would be surprised to know that an average of 40% of a store's revenue is generated by just 8% of active repeat customers.
Creating a membership program would be a great way to start improving customers LTV. 83% of customers said that they would continue doing business with a brand if it offers them a loyalty program.
Increase gamified engagement by creating exclusive sales and discounts only for members, special perks and more. This will put them on a path to discovering brand value and will also be a token of appreciation for their faithfulness.
For example, Shoppers Stop holds a preview sale for first citizens only, before it is opened to other customers. The points earned via the card can be redeemed by these members. This demonstrates that the brand values its exclusive members and establishes a long-term relationship with them.
3. Gamify the Onboarding Process
The leading cause for churn is poor app onboarding. When it comes to customer success, app onboarding should be among your top priorities.
As the saying goes, first impression is the best impression, it is here that you can make the most effective impact and engage with your users. Use low-code interactive engagement to build your onboarding process strategically to make sure users come back to your app after an interaction, increasing their lifetime value to your business.
Regardless of the strategy, make sure your onboarding process is straight-forward and simple, this can be achieved with walkthrough guides, interactive how-to videos, wrapped tutorials and other content.
4. Effective Customer Service
Customer service is absolutely necessary to help retain customers. Customers can churn if your service is below average, even if your product is above average. According to research, one-third of customers are likely to switch brands after a single bad customer service experience.
Having good customer service is crucial in creating long-term users. Try to respond to your user’s concerns as quickly as possible, and if feasible, provide a 24x7 support.
5. Pay attention to your Customers
Content customers are loyal customers. Learn what your users think of your business by collecting detailed, actionable feedback from them.
Understanding your customers helps you to focus on the areas of your business that drive customer loyalty and sales growth while reducing unsuccessful strategies.
Send out customer satisfaction surveys, which make it simple to understand customer satisfaction and allow you to ask follow-up questions to learn more about what customers like and dislike about your business, as well as what changes they'd like to see.
It's important to build a positive bond with consumers throughout the customer journey and throughout all of your interactions with them. The trick is to make them feel understood and respected while also letting them know they're dealing with a valuable business.
What should you do next?
Have a free consultation with our experts to see how you can improve your business metrics.
