When people think of business, they usually think of quick profits and what they would do with the money. However, as seasoned entrepreneurs can attest, business is really all about the long term. It is not about getting rich quick, but having a strong establishment that can sustain itself by having a constant stream of customers.
That stream of customers consists of both new and returning customers. The latter is what you have to focus on as having customers who regularly patronize your products or services is the main factor to a business’s longevity. When you have gained loyal customers, you have pretty much hit the jackpot.
In this piece, you will learn exactly why that is so and how you can encourage customer loyalty for your business. Being able to acquire new customers is not enough because there could only be a number of new customers out there. Retaining customers and making them loyal to your brand is what can really guarantee
Why Customer Lifetime Value Matters
When it comes to measuring how loyal a customer has become to your business, there is the Customer Lifetime Value (CLV). The gist of it is fairly simple — it is how much profit you have earned from a single customer throughout the entirety of your business. The more often a customer buys from you, the higher the CLV potential is.
Being able to have a big bunch of customers with high individual CLV is what you want. With them as a major source of your revenue, you can apply the Pareto principle of concentrating most of your effort in pleasing them rather than spending time, money, and energy in attracting new customers who may only buy from you one time.
In summary, it is not to say that attracting new customers is unimportant, but being able to hold on to loyal customers is much more significant.
Strategies to Gain CLV
Offer discounts and a loyalty program
Discounts are the easiest way to attract customers. Many of them may choose you as their
Having a loyalty program lets you reward patrons for regularly buying products and/or services from you. Make sure the program is fair and that the rewards are attainable by your most loyal customers. You can also spruce up your discounts with higher and better deals when they order more from you to really sweeten the deal.
Feature your customers in the spotlight
Another way to reward customers is to give recognition to the most loyal ones. Not only does this help make customers feel important and valued, but it also shows other people that you value your customers. This encourages them even more to become loyal regulars of your establishment.
cross-sell as advice to customers
The act of upselling is offering customers either more expensive versions of a certain product or suggesting the addition of features or warranties that come with it. Meanwhile,
You only upsell or
Bundle related or similar products
This tactic lets you offer more value and potentially get more products out the door more quickly. At a discounted price, you can offer a bundle of products that are similar or that complement each other. For example, a video game console bundled with games, or articles of clothing to go with the rest of an outfit.
Just make sure the bundles you put together do not add too many items as this may cost too much for your customer. If possible, keep it within reach of the original price of the base product that the whole bundle is centered around. However, you can also put together an ultimate bundle if the products you put in it are in quality high demand.
Utilize email drip marketing campaigns
To this day, email marketing is still a powerful tool for drawing in potential customers and keeping tabs with current ones. However, if you just blast people with emails, you won’t get through since spam filters will keep them out of inboxes. Therefore, you must employ a tried and tested method of email marketing to systematically raise and maintain awareness of your business.
Email drip marketing uses a series of
The emails may include a series that welcomes the user to the mailing list, another to thank and request feedback after a purchase, another to notify inactive users of what’s new to win them back, another to follow up on abandoned shopping carts, another to greet customers during yearly events like holidays, birthdays, and anniversaries, and so on.
Be prompt with delivery times to retain customers
Actions do speak louder than words, and execution is what makes marketing really stick. As a business, the best way to show your sincerity is not only by having good products and services but also being prompt in your deliveries. If the customer is told the product will arrive within the next two days, it better be there by then.
This has a lot to do with cleaning up and optimizing your logistics and channels of communication, and you should do so with the goal of pleasing your customer. When you do it right, your efforts will be rewarded in time as customers will notice how well things are run in your business and how good your services are.
Surprise your customers with something astonishing
It is a good thing to always want to give value to customers as it shows you are constantly putting effort into pleasing them. You can do promos, give freebies, and do other things at various times to provide more value to customers. It does not only draw new customers in, but also give regular ones a bit of a treat.
The trick is to not do it too often. Otherwise, it would no longer be a surprise, which would defeat the purpose of pleasantly surprising them with your generosity when they do not expect it. It is a way of giving back, especially when business is doing well. Customers will certainly appreciate that gesture.
Focus on improving your CLV
Being able to track your progress is a good thing as you learn what areas you can work on improving, as well as what your strengths are thus far. By tracking your average customer lifetime value, you are able to know what you are actually getting from your customers, thus a good indication of how much value you can provide them in return.
To calculate your CLV, you simply multiply Average Order Value with a number of repeat transactions and the months or years of retention for an average customer.
The higher the CLV your business gets, the better. It also shows how running a business is not just about having a lot of customers. Quality customers are those who depend on your business for their needs and are willing to give you their money because they trust you and believe in your services. Focusing on bringing up your CLV instead of just trying to attract more customers may be the way to go for your business.
Being able to have a sizable loyal customer base is what will let your business survive and thrive even in the most competitive of markets. It demands a ton of effort over a period of time in order to achieve, improve, and maintain this specific customer base.
It is certainly worth the investment of time and energy as having loyal customers who rely on your business for their needs and wants is what forms a solid foundation upon which your business can stand on for a long period of time.
Do you have your own suggestions on how to gain your customers’ lifelong loyalty or still have questions yourself? Please feel free to leave a comment below. Thank you very much for stopping by.