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5 Ways to Increase Customer Lifetime Value

5 Ways to Increase Customer Lifetime Value

5 Ways to Increase Customer Lifetime Value

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Businesses of all types can benefit from improving their average revenue per customer, otherwise known as customer lifetime value (CLV). In this article, we’ll explore 5 proven tactics you can implement to improve this metric for your business.

There are 2 ways to grow a business: getting more customers and selling more to your existing customers.

Improving customer retention for your business by just 5% can increase your profits by up to 95%.

The process of selling to existing customers improves your business’s customer lifetime value (CLV), which shows how much your company makes in profit from an individual customer over time.

Customer lifetime value is the net profit contribution of the customer to the firm over time.


If you want to run a profitable business, CLV is important because it determines if your customers are generating a profit on an individual basis.

5 Tactics to Improve CLV for Your Business

  1. Improve your onboarding process
  2. Leverage email marketing
  3. Provide exceptional customer service
  4. Upsell and cross-sell
  5. Take care of expired credit cards

1.    Improve Your Onboarding Process

Optimizing your onboarding process should be a top priority.

In fact, poor onboarding experiences account for 23% of churn in subscription based businesses.

It’s important to put together an onboarding process for your business that encourages your customers to come back for more, thus increasing your CLV.

Make Onboarding as Fast and Easy as Possible

This can be accomplished by providing simple walkthroughs, interactive how-to videos, or other tutorial-style content that helps your customers fulfill their goals.

Personalize the Onboarding Sequence

If you have customers that come from different sources, consider personalizing the experience based on the source. If you have different customer personas, leverage this to create personalized experiences for each of them.

Segment the Signup Process 

If you have a checkout form, have one step where a customer enters their email address, then have them enter additional info afterwards. This lets you capture their email early on so that if they don’t complete the next steps, you can send them through a follow-up email sequence.

If you focus your efforts on your onboarding process, churn will drop, and customer lifetime value will rise as a result.

2.    Leverage Email Marketing

Every good marketer knows that email marketing is powerful.

Email marketing can be leveraged in two ways to improve your CLV:

  1. To recover lost sales that are a result of abandoned shopping carts.
  2. To recommend items based on purchase history.

As for the first of the two, with some studies suggesting that cart abandonment rates are as high as 80%, email follow-ups can be a powerful way to capture these sales that would otherwise be lost.

Your cart abandonment email doesn’t need to be complicated. For example, Doggyloot uses emails that are simple and easy to digest.

For example, Doggyloot uses emails that are simple and easy to digest.


The email displays a sense of urgency and includes a clear call to action. This is important to make note of for your business's abandonment emails.

The second way emails can improve CLV is by recommending additional products after purchase or as part of a cart abandonment email.

For example, Amazon sent me an email after I searched for a book on its site. 

For example, Amazon sent me an email after I searched for a book on its site.

Not only did this email remind me of my interest in the book “Decisive: How to Make Better Choices in Life and Work,” but they suggested an additional, similar one.

For any online business, abandonment and recommendation emails can improve your customer lifetime value. MailChimp has all of the features you need to make this work for your business.

3.    Provide Exceptional Customer Service

Quality customer service is absolutely necessary if you’re serious about improving your customer retention.

In fact, one-third of customers are likely to switch to a different brand entirely if they experience bad customer service.

So, how do you offer customer service that’s so good, it stops customers from leaving?

Offer Multi-Channel Support

Your customers may be on Twitter or Facebook while you’re only offering email support. Find out where your customers are and make sure your team is properly trained and equipped to handle customer support issues through these channels.

Offer 24/7 Support

Customers these days expect fast response times to their questions or support requests. This is why having 24/7 support is so important. You can do this by hiring a support team in a different time-zone to your own that can handle support requests during your nighttime hours.

Offer Live Chat Support

Most consumers and businesses want to interact in real-time with a real human. The best way to accomplish this is by offering a live chat system. Doing so also makes it easier to offer 24/7 support since you’ll easily be able to leverage overseas workers.

If you provide great customer service, you create a strong relationship with your customers that keeps them coming back for more.

4.    Upsell and Cross-Sell

Upselling and cross-selling are two very similar strategies that can improve customer lifetime value.

Upselling is where you convince a customer to upgrade to a better version of an existing product. This is common in SaaS services. Netflix offers standard and 4K streaming, for example.

Cross-selling is where you offer a complimentary product as an add-on. This is common in eCommerce businesses. If you sell MP3 players, offering a set of headphones to go with it would be an example of cross-selling.

Bundle Products Together

Group products together and price them so that the bundle price is lower than the individually combined totals. This gives better your customers better value for their purchase and drives more revenue to your business.

Offer Temporary Upgrades

If you run a subscription business, offer users a free trial of the next tier up from their current plan. If you have basic and premium, offer your basic subscribers a free trial to your premium service to incentivise upgrades.

Offer Free Shipping at a Specified Price

Combining free shipping with a total order price condition can make purchasing more products very appealing to your customers. With this type of offer, customers are likely to spend more overall.

Whatever your business, find a way to implement upselling and cross-selling. Doing so can increase your customer lifetime value by up to 10%.

5.    Take Care of Canceled or Expired Credit Cards

Credit card charges can be declined for a variety of reasons. Some examples include:

  • Attempting to spend past one's credit limit
  • Corporate expense policies
  • Attempting to use a credit card past its expiration date
  • Attempting to make a purchase with a lost or stolen credit card

The best course of action to avoid issues with failed credit card charges is to leverage a dunning management system – a system that automatically notifies your customers of credit card issues through a sequence of emails.

This is crucial for subscription businesses, but can also benefit e-commerce businesses that leverage customer accounts.

You can build this yourself with the help of a software developer, but here are some billing management systems that include dunning management features:

Whatever system you decide to leverage, whether it’s from external software or something you build internally, avoiding expired credit card issues is an essential part of improving your customer lifetime value.

Businesses Can Improve Customer Retention by Catering to Customer Needs

Businesses can improve their CLV by improving their onboarding process, leveraging email marketing, and providing excellent customer service. They can also think about what their customers might need and upsell or cross-sell items. 

I’ve personally executed these strategies for some websites I’ve worked with over the years and have seen great results. Whatever type of business you have, you can apply these tactics and expect them to significantly increase your customer lifetime value.

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