Once you have calculated your CLV, what can you do with it? Here are some ways to apply CLV to your business: Get Higher Value Customers
First, you need to calculate the CLV for all your customers and then you can identify which customer groups provide the most value for your business. Once you do, it will make a lot more sense which people to target and how much you should spend on acquisition costs. At the same time, you can identify which acquisition channels will bring you the most valuable customers.
Increase Engagement For Your VIP Customers
After doing an analysis regarding your CLV, you phone number list can then classify the customers that you consider to be the most valuable for your online store. With it, you can send them vouchers or freebies.
Customers will tend to make more purchases if you give them a discount. Over time, this can improve customer retention. The same effect can also be achieved when customers receive free items.
- Preventing Churns
Calculating CLV helps you better segment your customers. Therefore, you will be able to send the right order to the right group of customers at the right time. With that, there is a higher chance of engagement.
- Find Your Weak Points
Once you know your CLV, you will be able to identify points for improvement.
Let’s say you sell gadgets online and your primary product is an iPhone while your secondary product is an Android phone. When you calculate the CLV, you see that a large portion of your sales will come from secondary products rather than your primary product. In this case, you will be able to reconsider what products you should focus on marketing. Having this perspective will help you increase your sales in the long run.
Measure Ad Performance
Let’s say you run two ads where you get your customers James and Stacy. James bought a pair of sneakers from your store for $300 while Stacy only bought something for $150.
But James has only bought it once in the last 6 months while Stacy has bought 3 pairs. Now you know that the advertising you invested in acquiring Stacy as a customer was effective in gaining valuable customers.
Knowing your CLV helps you see areas in CNB Directory your business that need improvement so you can increase your bottom line. The more effort you put into this metric, the more you can increase your conversion rate in the long term.