How to raise customer LifeTime Value (LTV): The speedy guide
These days, online brands can’t stop talking about raising customer lifetime value (LTV).
The focus on recurring revenue is indicative of two things. For one, it shows the influence of new-age business models like subscription, where users pay monthly or annually to access a product or service.
It also shows that brands in verticals like fashion, DIY, and travel want to look beyond a first sale and onto ways of creating stronger, longer-lasting relationships. And that’s definitely a good thing.
How to raise LTV through hyper-personalization
To start raising LTV, you have to appreciate that every customer is different. It’s why a user of your premium service has less room to increase their LTV than someone who’s currently enjoying a free trial. They each require a completely different approach, message, and action.
The case for hyper-personalization when raising LTV is incredibly straightforward. Done correctly, LTV requires a 1-2-1 examination of the customer, their orders, and behavior, which hyper-personalization can certainly deliver.
It also provides a way of issuing the right incentive, reward, or content to the right person. Using triggers that react to scenarios, you can always lay out the next step in someone’s journey with your brand. Here are some of the ways of boosting LTV through hyper-personalization.
Second-order incentives
Raising LTV is very different from goals like driving revenue or acquiring new customers.
The first step is to consider the long-term impact of small yet significant actions. Using automation to issue a $10 egift card on a second purchase sees you giving a little after getting a lot. You’ve then kept your brand at the front of the customer’s mind and created their next step to follow.
Upselling and cross-selling on every cart
Sometimes the order value is a little lower than you’d want it to be. Recommending a better or additional product in real time can bring that cart and customer into a higher tier.
All you need is an AI-driven solution to hand-pick offers that are relevant to the existing order. That way, you can make every single customer more valuable than before.
Demonstrating value through hyper-personalized content
Hyper-personalization solves a number of key challenges when growing LTV. For one, it appreciates and reacts to the way certain customers enter the upselling process.
Budget constraints might factor into a consistently low level of spend. However, you can always use hyper-personalization to demonstrate how a more expensive product also provides better value overall. This feeds the idea that LTV works for both you and your customer to create a joint success.
By delivering the next step in each customer’s journey, hyper-personalization should guarantee a long future with your brand. Here are some additional ideas from RevLifter’s campaigns team:
Secure a repeat purchase
Deals and offers work wonders for acquisition. An untapped opportunity is the use of these methods to increase retention, leading to sustained, incremental revenue.
Deploy RevLifter’s second-order incentives to ease recent purchasers into a ‘frequent buyer’ status.
Target AOV to make every customer more valuable
Combining tailored product recommendations with hyper-personalized deals leads to an average AOV boost of 20%.
By consistently driving bigger purchase values with tailored suggestions, you’ll see a short-term performance boost and an incredible impact on LTV.
Upsell and cross-sell based on margin
Recommending superior or additional products is a subtle method of improving LTV.
With RevLifter, you can apply rules that direct buyers to specific items, letting you upsell customers on premium services, or cross-sell with something they might need in the future.
Need more ideas on raising customer lifetime value (LTV)? Book a demo with RevLifter today.
