How much are your customers worth? In B2C marketing, there are few metrics more important than Customer Lifetime Value (CLV) when it comes to maximizing the impact of the efforts you’re putting forth into the market. To be cost-effective and efficient with your strategy, you need to understand the CLV of various customer segments and target your marketing appropriately.
But customers’ places in that hierarchy are never set in stone, and increasing CLV — both at the individual and broader overall level — can be a huge win for your team. And cross-channel marketing can be a key part of your strategy for boosting CLV. Here are some tactics you can use to put messaging at the forefront of your campaign to increase CLV.
Create a segment for your “best” customers
Whenever you’re building out new audiences for campaigns, you should always have segments at the ready for your high-, medium-, and low-CLV customers because it creates a great opportunity to target them in different ways. The likelihood that you can increase an individual customer’s CLV — and the percentage you’re likely to be able to increase it — grows as they move higher up that list, at least to a point.
In other words, generally speaking, the more a customer has spent with you in the past, the more they’re likely to spend with you in the future. Especially with the right marketing campaign aimed at getting them to do just that. But the first step is setting up these segments, and making sure they’re updated regularly. The more organized your data and the better your access to it all, the more up to date you can keep these segments to ensure your future campaigns are going to the right people.
Target these “best” customers with deals
Now that you have your most loyal and highest-spending customers in their own segment, you can start targeting them with messages and other content designed to bring them back and increase their individual CLV. There are lots of options here for how you can tempt these customers to spend more money with your brand. Here are a few options to inspire your next campaign:
- Strike while the iron is hot by including related product recommendations right inside their transactional messages. You know they’re already in a buying mood, and you almost certainly have complementary products to whatever they recently purchased. See if you can get them back immediately, even if it’s only to add something to a Wish List. And don’t limit yourself to email. You can even include these recommendations right on the checkout page itself.
- Give your best customers a trigger price to get free shipping. Maybe you have this for all your customers, but perhaps you reward this “best” segment with a lower trigger. While this could induce lower spending, it can also be a perk that brings them back again and again. It’s worth testing to find your sweet spot.
- Send them push notifications with special flash sale codes, and tell them it’s only for the most loyal customers. This makes them feel special and like they’re getting something few others are. And that can encourage even more loyalty and buying behavior.
Offer subscription program
Not every brand will be in a position to do this, but they’re becoming more and more popular for increasing your brand’s overall CLV. Instead of relying on customers to come back to you and go through the usual steps to make a purchase, lock them into regular spending with a subscription program that sends them a curated box of products directly to their home.
This is great for your overall CLV because it makes it easy to spend regularly with your brand by essentially automating it. And customers are then constantly reminded about your brand each time they receive a new batch of products. You’ll spread out the spend among a good number more customers and increase the reliability of revenue per quarter.
Be selective in recommending higher-priced items
For brands with relatively big-ticket items in their inventory to go along with smaller ones, it’s important to understand that not every customer will be a buyer for those high-priced pieces. When you’re making product recommendations, every slot you use should be thoughtful, based upon who this customer is and what their behavior has been. Recommending a $3,000 dresser to a customer who’s never purchased anything more expensive than a $50 lamp could not only be a waste of valuable email space but also a bad experience for the customer.
Instead, utilize segments like the ones we talked about earlier to put customers into buckets of people with a propensity for higher or lower spending. Every sale matters, but those big-ticket items can be a huge boost when it comes to revenue and CLV. So make sure you’re recommending them to people with a reasonable likelihood to follow through with the purchase.
Refine your cart abandonment program
One of the best ways to increase CLV is to make sure customers don’t walk away from purchases at the last possible moment. An effective cart abandonment strategy is essential for this, reaching customers with timely messages that bring them back to complete a purchase that they left just before hitting that button to make it final.
How effective is your cart abandonment program? Studies have found shoppers tend to open these emails at a 46% rate and convert at about 4.5%. If you’re not seeing those sorts of numbers with your campaign, it’s worth trying to understand why. Timeliness is key, so make sure these emails are going out within a couple of hours of the cart abandonment. Include a picture of the product, and perhaps make other recommendations too. Also, in case there was an actual problem with the site, it can be worth including a way to contact customer service.
Incentivize them to visit in store
For brands that have physical locations, it can be worthwhile to entice customers to visit those stores rather than merely keeping them engaged online. Yes, you’re probably engaging with them in a digital-first mindset, but there’s a lot of value in the in-store experience.
According to Greenbook Market Research, Best Buy said 52% of customers who shopped in store made a purchase, about twice the percentage of online shoppers. Greenbook also found that customers who came into a store were more open to larger purchases, perhaps due to the risk being lower. They can see first hand and touch the item they’re looking to buy. It takes away a lot of the unknown, and that’s a big deal with larger purchases. And larger purchases boost that CLV.
So, think about how you can get them into your store. Maybe email them a discount code that can only be used at a physical location. Make sure they know when a new store opens near them, and give them a financial incentive to visit. Perhaps even use geolocation to know when they’re nearby and send them an in-store code then. However you do it, getting them in store has a good chance of paying off.
CLV is one of the most important metrics for enterprise brands, and cross-channel marketing can be a big part of a strategy for increasing it. Segment your audiences smartly, and use some of the above tactics to reach the right customers with messages designed to get them to keep coming back to your brand when they’re in the spending mood.