Now you know your exact CLV, an essential metric for any marketing strategy. Whether you are happy with the result, or the numbers appeared to be lower than expected, there is no time to rest.
Many businesses use this metric to analyze their audience and adapt their business tactics accordingly.
You don’t need to be a math whiz to find your CLTV but it requires some information about your store visitors and a bunch of other boring things that most people don’t want to care about. That’s where a Customer Lifetime Calculator comes in.
To compute your CLV, our customer lifetime calculator does some advanced math by using key numbers:
Let’s say you’re a clothing retail company. Your average sales price is $50 and the average client makes 10 purchases within a year. Moreover, your average customer lifetime e-commerce is 5 years, and your cost to attract a new client is $250.
The lifetime value of the customer can be obtained as follows:
CLV = (annual customer profit X retention period) – marketing expenses (for that individual only)
This number gives you insight into the customer lifetime value, as well as insight into whether your marketing strategies are successful.
Now we’ll go over two tactics that help you enhance your LTV or CLTV. And, of course, you should be ready to make changes to your marketing plan and enhance the process if necessary.
One of the greatest factors that can maximize your lifetime value for each store visitor is a high retention rate (how frequently your shoppers buy something, how long they browse through the store). The first step towards customer retention is to recommend products that your shoppers may be interested in.
Upsell & cross-sell apps like Recom.ai - Upsell & Cross-sell help you provide your store visitors with really useful product recommendations while inspiring them to stick around.
These are several cool things that you can do with this app:
Recom.ai will generate recommendations for products that your audience is likely to love, saving you all sorts of time and effort.
Once you’ve provided your clients with the opportunity to interact with your company, it’s time to show them your love. Many marketing techniques for maximizing lifetime customer value are based on making shoppers feel valued.
From creating well-timed marketing campaigns to encouraging shoppers with gifts to supporting them, a key to boosting CLV is a focus on the individuals who help your brand grow.
The easiest way for measuring CLV is:
CLV = (Average Number of Transactions X Average Order Value X Average Gross Margin X Average time the client remains active) / # of New Clients
Understanding how to measure this metric - and how to improve it - is critical. Here's why: