If you’ve read the article on calculating customer lifetime value, you would know that some of the parameters used to derive customer lifetime value include the average sale value, the number of transactions per customer annually, retention period and your profit margin. Suppose you noticed that customer lifetime value is determined by multiplying all these quantities together. In that case, it’s glaringly apparent that a hike in any of these parameters will get us the much-coveted boost in customer lifetime value.
A hike in any of the abovementioned parameters is easier said than done. The truth is, we all know the results we need to attain, but the precarious part is about how can we achieve it inexpensively. At Hitch Marketing, we understand your pain, and here are some ways to multiply your customer lifetime value, at almost zero cost!
1. Listen to Your Customers (and prove to them that they are being heard!)
People, in general love being heard. It makes them feel like they matter, and that’s the first step in cultivating brand loyalty. Engage your customers, be it through Instagram polls or focus group discussions, and ask them for their opinion. While customers may not be the most knowledgeable on the constraints your brand faces in meeting their needs, they can give you an alternate perspective on what they need. You never know, your brand’s next big update might be from an unassuming customer! \
If you’re lucky to receive a fabulous suggestion from your customers, remember to credit them for their brilliant ideas! Tag them on Instagram or give them a shout out and share with other customers. Small things like this help paint your brand in a positive light – one that is genuine about solving customers’ problems rather than a shallow, profit-driven brand. Oh, but remember to get their permission first before giving them a shout-out! Some people treasure their privacy more than anything else.
2. Always Be There to Serve Your Customers’ Needs
While social media accounts of your brand are not meant to be the official channel for customer service, it is still essential to equip the staff handling these accounts with basic knowledge of your brand and its products. Just put yourself in your customers’ shoes. Imagine facing a severe predicament, and just when you thought you were going to receive help in resolving it, the personnel refers you to their customer service email address (which will probably take days or weeks to solve your woes).
Come on! We’re living in the 21st century and such level of customer service ain’t befitting of a 21st-century brand. Your social media accounts are touchpoints, and you need to ensure that the people staffing them are capable of handling customers’ inquiries. By handling, I don’t mean redirecting them to emails. I meant guiding them step by step until the problem is solved satisfactorily, and getting them connected directly (not redirecting!) to someone who can help them. A good role model would be Apple’s 24-hour chat support. I’ve tried it three times, and for the first two times (both happened at the witching hour), they took less than an hour to solve my issue. During my third consultation, they directed me straight to a local store as it was a hardware issue, made all the arrangements (i.e. fixing an appointment). While Apple’s products are on the expensive end, I’ll gladly offer my moolahs, no questions asked (Disclaimer: I’m not being paid by Apple to say this).
3. Support Your Customers
Give your customers the voice and power to become changemakers. Ask your customers to tag you when they are doing something related to your brand, or even conduct contests to award customers with brilliant ideas! For example, Lego members get to submit their ideas and judge one another’s propositions. The idea that receives the most votes gets a chance to go on the market! Such contests build a community centre around the brand and customers’ passion and do great work in fostering a sense of belonging and that often translates to brand loyalty.
4. Give Customers an Upgrade (for free!)
From time to time, give your customers a taste of your premium services. This may sound counter-intuitive as not only does it result in a monetary loss, there’s a good chance that your customers may be over-reliant on these free treats and forgo the idea of upgrading. However, this works just like giving out free samples in physical stores. If your product is good enough, it shouldn’t be a concern. After all, customers can be excellent judges and are willing to fork out money for extraordinarily good services and products! Moreover, for subscription services, giving out a week or a month of free trial exposes customers to the possibility of being ‘addicted’ to your service. For example, Netflix gives a 30-day free trial for new customers, to provide them with a better idea of how useful Netflix is and let’s be honest, can you really live without Netflix after trying it out for 30 days?
5. Offer a Personalised Experience
According to a report by Capgemini’s Digital Transformation Institute, 8 in 10 consumers are willing to pay more for better customer experience. But what exactly is customer experience? While they may sound similar, customer experience is very different from customer service. The former encompasses details like user interface, application procedures, availability of digital services conveniently, etc. There’s really a lot of things to consider when it comes to crafting the best customer experience, but there’s one golden rule to this game – personalisation.
As your customers make more purchases, you get more data on their purchasing trends and spending power. Don’t let all these data go to waste! These data give a clearer picture of your customers’ needs and wants, making it easier to do cross-selling and up-selling!
There are many other ways to make use of personalisation to deliver a better customer experience. For example, sending them a mail or in-app message during their birthdays or the anniversary of their membership or even personalised daily messages to kick-start their day! These are some of the common examples and if you want to stand out amongst your rivals, you gotta up your game. Regardless of how you want to personalise your brand’s customer experience, the key objective of it is to forge a special bond between your brand and your clients, instead of treating them as a mere source of profit.
So what are you waiting for? Now that you have some inkling of how customer lifetime value can be boosted, start brainstorming for solutions unique to your brand! As you ideate and obtain more data based on your new resolutions, do remember to use our customer lifetime value calculator to check if your new ideas are doing more harm than good!