“The key is to set realistic customer expectations, and then not to just meet them, but to exceed them, preferably in unexpected and helpful ways” – Richard Branson
There is indeed a great reason behind why some businesses are more successful than some other ones. While this might be true that new businesses are taking the world by storm, focusing more on capturing new customers than retaining the older ones, the truth, however, is that you cannot have a business unless you know how to retain your previous customers. Customer retention is critical to any business, which further decides the Customer Lifetime Value (CLV). If you are unfamiliar with what Customer Lifetime Value is and how it works, here is what you need to understand.
“Customer Lifetime Value is used to determine how critical a customer is to a business. It is measured as the amount of profit a company has been able to make during their relationship with the customer, subtracting the costs that it had to the company.”
The Customer Lifetime Value broadly depends on the two fundamental aspects – brand loyalty and customer retention. If fact, both of these go hand in hand. Without a loyal brand, you cannot have the power of retaining your customers. For an entrepreneur, it is critical to realize that customers will only come to you if you make them trust in your brand offering the value that they expect from you. According to Marketing Metrics, the probability of selling a product to a new customer falls close to somewhat 5 to 20 percent while the same product or service, if sold to an existing customer, will have a selling probability of about 60 to 70 percent, which is clearly a lot higher – the only reason, why CLV exists.
Here are some best ways to increase the CLV if you are a business.
Build Relationships that Last
This goes without saying that being honest and providing your customers with what they really want, is the foremost step to building a long-term relationship with your clients. Share with your clients the useful knowledge that could help them in their business. Establishing a mutually profitable relationship by referring their business to others, using their products or services and allowing them to use yours, is a good way to start off the journey of building a lasting relationship.
While this may take a little extra care on your part, the time and effort that you put in to retaining your customers and making them realize that you are a trustworthy brand will certainly offer its worth in the long run.
Take the advice of customer
In simple words, you have to win over your customers’ hearts. You have to improve constantly to leave an impression on your customers. When they are happy, they would more likely become repeat customers. Create a poll asking for what improvements they might need. Share it on your blog, social media accounts or through your email and see what responses you receive. Take your customers’ suggestions for granted and say thanks to them every time they come up with an advice. It would help if you offer some gift card or anything of use to engage more users to the poll, and as someone wins, congratulate him/her for the reward and say thanks for taking the time out to participate in the poll.
If you ultimately happen to bring a change due to the feedback that you’ve received, respond gladly to whosoever is accountable for that change. Appreciate him/her for coming up with the idea and announce it on all your marketing or social media channels.
Stay One Step Ahead of Your Competitors
This may not be that easy, however, determining the products, features, or services that your competitors do not have and including them in your business would definitely make an impact on the minds of your customers. In this digital age, there is a tough competition among the businesses so you have to be conscious about the additional value that you can provide to your customers.
Have good, supportive customer service. Treat every customer individually. For instance, if a regular customer of yours is interested in a certain specific category of products such as comics, and you know that already, keep a few good comic books aside for him so he may not have to spend time asking for it. This is another good way to build lasting relationships.
Solve Problems for Your Customers
Customers would be more than just happy to take your services if you are able to figure out their problems and come up with the solutions that they anticipate from you. Take your time to realize what problems they face. Offer them the solutions or answer their queries through your social media channels. Bear in mind that your goal is to make life easier for your customers and once you get it right, you will be able to build a trust, which is simply irreplaceable by anything else.
Quality Should Be Your Topmost Priority
As you would brag about a good thing you have in your pocket, which maybe your smartphone that has some additional features unlike the other ones, a customer would certainly like to spend money on something that no one else has. Keep the ‘quality’ as your topmost priority. Even if a product is selling well, think about what other improvements can be made to it. Since you do not want your customers to get bored and stop using a product, you have to keep making the necessary amendments to keep your customers interested all the time. Like everything else, brand loyalty does not come that easily. You have to spend time evaluating the customers’ behaviour and deliver them the best you can.
Now, this is important for every business. The customers will have certain queries, which they would need an answer for, and providing them the best communication you can would certainly help to alleviate their problems. Talk to them via phone, chat or any other channel they would prefer. Determine the best time to contact your customers and give them the support they need. Do not think about what is important to you, instead, pay attention to what your customers want. A consistent communication, which customers could trust, really adds some worth to your Customer Lifetime Value.
Point Out Necessities
Customers would like to buy something when they think it is necessary. Think about what else they might need with a certain product or service and provide them a ‘combo’ offer – such as a smartphone, with a cover is something they would like to spend their money. Providing a combo offer would definitely help. Not only will it increase your sales, but also your customers would be delighted to have the offer, which they required.
In the end, it is up to a company to see what can be measured or how much effort is put in to keeping customers engaged and entertained. Sure enough, things may not fall your way that easily, and you have to work ‘real’ hard to increase your brand loyalty. However, spending time recognizing the behavior of your customers and offering them the value for their money would go a long way to escalating the Customer Lifetime Value. While this may be a time-consuming endeavor, remember that what comes easy will not last, and what lasts will not come easy!