When your clients work with you, is that the end of the line or do you seek more opportunities?
Customer Lifetime Value (CLV) is the average amount of money that a single customer makes for your business. It is the figurative dollar value that each new customer brings to your business represented as an average.
No matter what industry you’re in or what stage of business you’re at, having a clear picture of your CLV will help you set better goals as you will have a solid understanding of what it will take to reach your next milestone.
Here are three ways to increase your customer lifetime value and provide a better service to your clients:
Improve your onboarding
When you take on a new client, they get their first taste of what working with you will be like. As we know, first impressions account for a huge percentage of perceived satisfaction and trust when it comes to business and client relationships. The better your onboarding process, the better your clients will feel about their decision to work with you. Higher customer satisfaction increases the likelihood of that customer becoming a repeated source of business and spending more money with your business.
When your customer is finished working with you, don’t hang them out to dry. Staying in touch with past clients keeps you top of their mind and keeps the warm and fuzzies they have about your business alive for an extended period of time. Retention is an excellent way to increase your customer lifetime value exponentially.
Maybe they don’t need your help again immediately, but down the road when the right situation arises, you want to be the first person your past clients think of to solve their problem. Previous clients are significantly more likely to buy from you than a cold audience. Especially if your offer evolves with their needs. It should be the number one priority of your business to build and maintain relationships with your customers.
When most people think of CLV, they think upsells. While they’re not wrong, selling a higher value product or service to someone who has already established a relationship with your business and brand will increase your customer value, there is another way to increase a client’s value—referrals. If each of your clients were likely to refer more clients, the compounding effect would lead to a huge increase in CLV, massive growth, and more revenue for your business in the long game.
A referred prospect is 60% more likely to convert than someone who discovers your product or service through organic means which is 85% more likely to convert than those who discover your product or service through paid advertising (Facebeook ads, Google ads, etc).
Growing and scaling your business requires more than generating leads. It means optimizing your systems and offers to get the most from the connections you already have. This creates positive client experiences which lead to more repeat and referral business, the most qualified traffic you’ll find.