Customer lifetime value (CLV) is a metric that calculates the total amount of revenue a customer is likely to generate for a company over their lifetime. It’s used to assess the value of customers to a business, and it’s one of the most important metrics for understanding how well your company is doing. It helps you make decisions about how much to spend on advertising and marketing campaigns, whether or not you should be looking at new ways to bring in customers, how much time you should spend on customer service, and so on.
The idea behind customer lifetime value is this: if you can increase your customer retention rate, then you’ll also increase your lifetime value. But how do you increase retention? Well, there are lots of ways—and each one has different consequences for your business model.
Getting Past Break-Even And Growing CLV
The first step to making sure your CLV is growing is getting past break-even. Break-even is the point at which you start making money from each customer, but it’s not an end goal by any means. If your business is based on only one product or service, then break-even is just the beginning of your journey as a company—not the end! Break-even is where you can start thinking about growth and expansion because once you’re no longer losing money from every sale, then you have room to grow into other areas of your business.
So how do we grow customer lifetime value? There are two main ways: using technology and creating a multi-channel experience.
Craft a Multichannel Memory Lane
Once you’ve gotten past your break-even, it’s time to start thinking about how you can use technology to create an experience that makes sense for everyone involved: the company, its employees, and most importantly—the customer! To do this effectively, consider using tools like chatbots or virtual assistants so that people can interact with whatever they need easily without having someone babysit them.
Additionally, make sure that your customer service is easily accessible and that you’re using the channels that your customers prefer. This could be anything from a phone to chat to email to social media.
Use Technology To Grow Customer Lifetime Value
There are a lot of different ways to use technology to increase customer lifetime value. One way is by developing a mobile app. People are constantly on their phones, so it makes sense to have an app that makes it easy for them to interact with your company.
Another way to use technology is by using customer data to create a more personalized experience. By collecting data about customer behavior and preferences, you can create targeted content and offers that are more likely to be relevant and appealing to them. Additionally, you can use this data to improve your customer service so that you’re addressing the issues that are most important to your customers. By doing this, you’re increasing the chances that they’ll stick around for the long haul.
What’s Next?
Now that you know how to increase customer lifetime value, it’s time to put your plan into action. Start by considering which of these two options makes the most sense for your business and then start implementing the necessary changes. With a little bit of effort, you can start seeing a big difference in your customer’s lifetime value in no time.
