lifetime value of a client. CLV: Customer lifetime value This measure goes by many names, but it always refers to the anticipated net profit of the entire relationship with a specific customer. High lifetime value customers are ideal for any business, which makes sense given that they have a strong affinity for your brand and a persistent desire to spend money there.
The goal of this article is to increase your understanding of how your customer retention strategy affects CLV and to provide you with a comprehensive list of loyalty programme features that can raise this statistic.
Increasing the Number of Purchases
Nothing is more upsetting than having a promising consumer enter the store, make a purchase, and then leave without returning. One of the key benefits of a loyalty programme is that it encourages customers to continue with your brand and consistently pick you over your rivals. Customers have a motive to keep coming back when they are given gifts, incentives, and free services. Additionally, a loyalty award feels far more personal than a conventional discount and results in an emotional high.
- Individualization
Displaying pertinent information to your customers is a proven approach to capture their attention. In this way, loyalty programmes assist you in gathering a variety of client information that can be applied to your marketing automation.
Customers are more inclined to participate in quizzes and surveys by being given a modest gesture of appreciation in exchange for disclosing their product preferences, shoe or garment size, favourite colours, way of life, purchasing patterns, etc.
Although encouraging consumer profiling requires a one-time expenditure, you will gain knowledge that you can use to make tailored product suggestions in emails or on the website for years to come.
- Point elapsed
A well-known strategy to get individuals to make more purchases is to include a ticking clock in the incentive system. Just give each member’s remaining points an expiration date and restart the clock if they choose to make a purchase.
Success depends on locating the ideal location for your expiration window. Sometimes, customers are prepared to spend a small amount of money to keep their points from expiring, but if they learn about it too frequently, they will lose interest.
In order to run point expiration without creating annoyance, you must email your loyalty members in advance to let them know. This is an excellent chance to show off your personalisation skills.
- Awards & obstacles
It makes sense to gamify the loyalty experience to increase consumer investment in your company. These modest but significant accomplishments honour members for their ongoing commitment.
Consider rewarding consumers with a special badge that appears on their membership page along with a few points or a small gift after they exceed a certain threshold, like completing five purchases in a calendar year. Similar to badges, challenges function similarly, except they demand a number of actions from the consumer.
It is advised to develop numerous levels for each badge or challenge because the goal of using them is to encourage repeat behaviour. One purchase, for instance, could result in receiving the level-one badge. Members would have a sense of success right away. However, users must make three transactions in order to earn the level-two badge.
- Gifts for birthdays
High customer lifetime value is built on emotional attachment. Consider rewarding clients unexpectedly, such as on occasions like birthdays or membership anniversaries, if you want to create genuine brand loyalty.
The recipe is straightforward: on a customer’s birthday, send them a highly personalised email informing them that they have gotten a small present for their special day. This reward may take the form of extra points or a modest item that is delivered with their subsequent purchase.
People feel grateful after receiving the nice surprise and are tempted to visit your website right away in order to take advantage of the free present, which leads to purchases that might not have been done otherwise.
A Successful Loyalty Program Can Increase Customer Lifetime Value
As you can see, a number of factors affect client lifetime value. This gives you a level of freedom, because you can mix-and-match features in your loyalty program and really serve your business KPIs – as long the program itself is built proficiently.
And don’t forget to download Antavo’s Customer Loyalty Report 2022, an in-depth report that showcases dozens of statistics as well as future industry trends to help you navigate the world of next-gen loyalty programs.