Bury St Edmunds social media and marketing expert Kim Morrison offers tips on 'expanding the lifetime value of your customers'
Do you spend most of your time and marketing budget looking for new customers rather than nurturing your existing ones?
It’s important not to forget your existing customers as these few marketing statistics illustrate:
- Acquiring a new customer can cost five times more than retaining an existing customer.
- Increasing customer retention by 5% increases profits 25-95%.
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
You probably know each customer has a lifetime value in business. This is called the CLV, customer lifetime value. It translates into the amount you can earn on any one customer as they enter your product funnel and make their first purchase from you.
Understanding your CLV can help you determine how much you should spend on marketing, and also help you determine ways to expand your CLV.
Become More Customer Centric
Customer service is one of the most important parts of any business. Even if you have the best products or services in the world, if your customer service is lacking you won’t last long. If you want repeat buyers, treat your customers with the importance they deserve.
Build Targeted Upsells
With technology you can easily create an automated system to build upselling into your buying process. For example, you can do it in the shopping cart, an offer at the till point or you can do it through follow-up emails.
Create Logical Cross-Sells
A cross-sell is a just selling a different product to a current customer. It should relate to your audience, but it doesn’t have to relate to the first product you sold them the same way an upsell does.
It’s imperative that you set up a system that makes you seem super responsive to your customers. Whether that is a ticketing system, a 48-hour answering policy, or open office hours doesn’t matter. You need to be perceived as very responsive to keep your customers happy.
Every product or service that you deliver should be better than your customer expects. Though you won’t please everyone all the time, you can aim to over deliver. If a customer is unhappy, you need to over deliver with your solution to fix their problem.
Create a Referral Programme
Let your customers earn money or points by recommending you to other people. Often, when people can earn enough money to support their buying habits, they’ll be more likely to spend money with you. It’s a win-win all round.
Find ways to stay connected with your audience, such as social media, email, teleseminars, and webinars. The more ways they can connect with you, the happier they’re going to be and the more your CLV will expand. You do need to keep this relevant to them and not just bombard them with messages!
Develop an Inner Circle
One way to expand your CLV is to provide a fee-based inner circle that certain customers can join. It can be on a private forum or even be run as a private Facebook Group.
Nothing is more important in your business than your customers. The more you can study what they need and find a way to deliver it to them, the longer they’ll stick with you. But, you have to keep creating products to keep those who’ve bought from you interested and wanting more. You also have to deliver exceptional service and quality so they get past the first product they buy from you.
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