How to Increase Customer Lifetime Value with CareCloud
Customer Lifetime Value is one of the most important metrics to measure the success of a business. CareCloud can help you increase it with its emailing, segmentation, and loyalty apps. The road to profit lies before you. Make the first step!
CLV vs CAC
A practical way to evaluate a business’s success is by comparing Customer Acquisition Cost (CAC) with Customer Lifetime Value (CLV). While the former calculates marketing costs necessary to gain a customer, the latter informs you how much revenue an average customer generates over their entire interaction with your business.
If a business is to be profitable and efficient, healthy CLV should be at least 3 times higher than CAC, according to churnzero.com. Of course, cutting marketing costs to reduce CAC is a viable strategy, but striving to increase CLV instead lets you unleash your full marketing potential without decreasing your expenses. As things stand, retaining a customer is less costly than acquiring a new one.
Fortunately, CDP & CRM CareCloud offers solutions designed to track and increase CLV, thus improving revenue while optimizing your marketing potential.
THE NUMBERS THAT MATTER
There are many ways to calculate CLV, but for the most part, you should be aware of these KPIs: Average Amount Spent, Purchase Frequency, and Churn Rate. Except for the Churn Rate (which you aim to reduce), you’d best focus on increasing those metrics. And CareCloud will oblige to help you.
Our CDP lets you track CLV and the respective KPIs within its complex analytic tools and enables you to enhance your marketing directly through available functions. Let’s get those numbers up.
AVERAGE AMOUNT SPENT
The amount your customer spends on average can increase by well-placed product recommendations and be complimented by meaningful loyalty program rewards. As always, CareCloud has your back: use its email designer and loyalty engine to optimize both.
- Create product bundles within your email communication. Adding them may also boost cross-selling opportunities.
- Add our AI-powered recommendations to your targeted campaigns or newsletters. Whether you promote a specific product or simply keep your customers up-to-date, an additional suggestion may motivate customers to buy.
- Incentivize by awarding loyalty points per purchase and offer meaningful rewards in your loyalty programs. Find the right sweet spot to motivate your customers and make these rewards attainable. According to Loyalty Magazine, 45% of customers dislike loyalty programs solely because of how long it takes to earn rewards from their loyalty programs. Be aware of that.
Your customers may spend more on a single purchase but should also buy more often to secure a steady cash flow. In this case, improving overall communication and customer engagement is imperative. CareCloud’s Customer 360 View and advanced segmentation tools will give you the needed edge.
- Optimize communication with each customer. With a unified view, you will learn the customer’s preferences, purchase habits, and potential for loyalty. Plan your email communication accordingly.
- Create customer segments and adapt your marketing strategy. Using RFM segmentation, you can easily distinguish customers who are At Risk or Need Attention. With careful emailing, jumpstart their activity.
- Make use of all possible channels and add exclusive soon-to-be-expired deals. Email is not your only marketing friend: use SMS, Viber, WhatsApp, or other apps. Devise omnichannel strategies and sprinkle your incentives with urgent yet captivating offers.
The churn rate governs a company’s loss of customers within a certain period. You would do well to decrease churn and ultimately retain your customers for as long as possible. As the abovementioned tips for Average Amount Spent and Purchase Frequency apply quite well to decreasing churn rate quite effectively, let’s double down on customer loyalty!
Personalize communication, engage customers, and incentivize them. Create an exciting loyalty program that rewards repeat customers and builds brand awareness. Listen to your customers on how to perfect your service by sending NPS surveys or communicating with the buyers directly.
Many companies seek inspiration from other, more successful ones; however, the customer’s voice ultimately matters. Let that voice be heard!
MAXIMIZE THE POTENTIAL OF YOUR CUSTOMERS
CDP & CRM CareCloud offers complex solutions that will help you increase CLV. From Campaigns & Segmentation to Marketing Automation, all our apps provide the necessary tools for marketing success.
Of course, the suggestions mentioned here are but a springboard: during the improvement of your CLV, you will truly discover where your strengths lie. As corny as it sounds, it is also the journey that matters. CareCloud will gladly make that journey with you.
Don’t leave your profits to chance. Join CareCloud right now.
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