Ecommerce doesn’t stop at customer acquisition, does it? Once you have the customers, your next goal is to inspire loyalty so they’ll stick around and keep making purchases. Then, of course, you want to raise the lifetime value, encourage bigger spending on a more regular basis. There are always little ways—and sometimes big ways—to increase your customers’ lifetime value, including these 5 statistically sound techniques.
In the past, we've discussed how the lifetime value of your customers (CLTV) is one of the most important ecommerce metrics to track. Ecommerce marketers all over the world are working to increase customer retention and increase the value they can offer (along with the increased sales they can gather from their customers). What's been most effective so far for marketers?
You can’t expect to get anywhere with your customers if you send the same message to loyal buyers as you do to first-time purchasers. You need to know your buyers’ purchasing habits so you can segment them into various lists. What kind of campaigns would you send if you knew only your most loyal spenders would receive the invitation? How would your campaign differ for the list of shoppers who only show up when there’s a sale?
Segmenting your lists according to geographic location, buyer personas, past purchase values, and literally hundreds of other ways can help you focus on the best ways to increase each customer’s net value. That’s why 24% of companies use this tactic, making it the 5th-most popular. Important to note: Marketing agencies named this the 2nd-most effective, with 32% in agreement. It’s important.
Use Data More Effectively
Every time someone visits your ecommerce site, you gather data that will help you boost your customers’ lifetime value. Using that data in more effective ways is 4th-most popular tactic among companies, but again, marketing agencies find it even more important. Thirty percent say it’s the most effective.
You can use the data you collect through A/B testing, usability testing, surveys, and research to create a better experience for your customers and a more lucrative one for you. If you’re just tracking how many people have visited your ecommerce site and what they bought, you’re missing out.
Up-selling and Cross-selling
No matter how long a customer has been around, it’s never too soon or too late for up-selling or cross-selling campaigns. You should always been focused on raising each customer’s net value. Of the various techniques and tactics, cross-selling and up-selling is used by 29% of companies, making it the 3rd-most-popular choice for companies.
The idea behind the tactic is a clear winner, but the execution can be difficult. Asking someone to pull out their wallet once more after they’ve already made a purchase can look a little too cheeky if you're not basing it around what the customer actually wants to accomplish by buying from you.
Personalization and Customization
Technology has given us the ability to personalize the automated process earlier than ever, and marketers are using that to increase customer lifetime value. Data collected is used to create a one-of-a-kind browsing experience, emails are addressed properly every time, suggestions are made based on purchase history…the possibilities are endless. That’s why it’s the 2nd-most effective for both companies and agencies, at 34% for each.
Personalization is just a small part of a much bigger picture, too. When done correctly, customers feel cherished and important. If done incorrectly, buyers will feel a little weirded out. If you approach from a customer service point of view, you’re much less likely to overstep the line.
Hands down, this tactic was named the most effective for both companies, at 42%, and marketing agencies, at 34%. So many aspects comprise excellent customer service, too, including some of the items already mentioned. Personalized attention, customized suggestions based on hard data, inclusion in special deals based on segmentation—all of these things can also be considered excellent customer service. Of course, then there’s the part where you solve their problems, fix their broken products, and soothe ruffled feathers after a bad customer experience.
Offering excellent customer service should never be about driving up a customer’s lifetime value, either. If you anticipate a customer’s needs, go out of your way to make him or her happy, and repeat the process next time, loyalty and increased spending are just a natural byproduct.
Many of these tactics are impossible without the right tools. Can you really afford to segment your contact lists by hand every time you want to send out a new marketing campaign? Do you have analytics capabilities for A/B testing? Without automated marketing systems, you’ll spend more time putting these techniques into practice than you will selling your products, and that’s no way to raise customer LTV at all.
Originally published Apr 25, 2014 8:00:00 AM, updated February 01 2017