Most businesses are well aware of the importance of retention and LTV on their bottom line. So why does increasing them feel like such a challenge? In most cases, the issue boils down to first impressions — ironically, brands have only a limited amount of time to convince customers that they offer long-term value. This means that the most effective strategies to enhance customer LTV are often executed in a short time frame. With that in mind, here are some short-term techniques that will help your brand make a valuable first impression that keeps customers coming back for more.
More from PostFunnel on LTV:
The Potential Threats and Benefits Of Publicizing Customer LTV Score
Build Long-Term Relationships Using Customer LTV
5 Ways Today’s Telecom Giants Use Marketing Automation to Drive LTV
Make customer service a top priority
We live in a world where 90% of companies treat customer service as a core business pillar. Yet even now, the importance of customer service is impossible to overstate — especially when 89% of customers will switch brands following a single bad experience. The good news is the inverse is also true: Strong customer service encourages customers to maintain their existing relationship.
At a minimum, you should provide ongoing support through any channel your customers use. This could include on-site live chat, SMS messaging, or even responding to social media posts. Over time, it can also be worth investing in self-service options, such as a detailed knowledge base that can be browsed from a website or app. The more effort you put into supporting customers with their specific needs, the more likely they are to support your business — and recommend it to others.
Personalize experiences with relevant customer data
Customers appreciate personalized product recommendations or services. Studies on the subject back this theory and suggest that personalization is essential for modern brands. Roughly 81% of customers want businesses to “get to know them,” and take the initiative in reaching out. Meanwhile, 77% of customers will spend money on brands offering personalized experiences or recommend them to others.
There are many ways to deliver personalized experiences. The simplest is to deliver personalized messaging that recommends relevant products or services. More advanced techniques may include individualized customer service or integrating a custom UI that adjusts to customer preferences.
Whatever your approach, brands need to leverage customer data to ensure their personalization techniques are accurate and effective. Depending on their industry, marketers may want to access information from mobile devices, or aggregate data from a variety of customer interactions. Consider using a CDP to generate individual consumer profiles that highlight the most actionable insights.
Optimize your customer onboarding process
The best way to make a good first impression is to ensure your first interaction is as welcoming as possible. For customer-facing businesses, that often means offering onboarding that runs smoothly. Companies that improve their onboarding drastically reduce their churn rates. Notably, every 1% difference in churn correlates to a 12% difference in a company’s valuation after five years.
The exact nature of each process will vary by industry but, ideally, onboarding should accomplish two things:
- Orient a customer and provide digestible insights about the product or service
- Highlight the value of a product or service
There are a variety of ways to achieve these goals. At a minimum, companies should ensure that customers can quickly identify and engage with the product or service they seek. Onboarding should also make technical details as painless as possible. For example, if a business supports direct consumer transactions, they should be processed quickly and securely. Meanwhile, brands can highlight products or services that might encourage additional engagement.
Collect actionable feedback and respond to it
When a business has done something wrong, customers candidly discuss their error(s). Perhaps they’ll fill out a customer service survey, rate your brand online, or simply rant about a bad experience on social media. Whatever the scenario, these communications are an opportunity to enhance your services and retain customers in two ways:
- By drawing actionable insights that let you course-correct existing problems
- By providing the chance to engage with customers and show their feelings matter
Marketers often underestimate this latter point, but it has a measurable impact on your bottom line. Businesses that respond to public customer service ratings — positive or negative — tend to have better reputations among existing and prospective customers. Google has even confirmed that responding to customer feedback often increases a brand’s SEO. As long as you respond fairly and professionally, even negative feedback can provide a net benefit.
Emphasize brand value with each communication
As they say in the classic film, A Field of Dreams, “if you build it, they will come.” For brands, this has one important caveat: You must demonstrate value. Anyone seeking to attract or retain customers must prove that a relationship with their brand is rewarding.
In practical terms, this means that companies must engage with customers in ways that highlight their contribution. Simply maintaining a consistent social media presence is one way to highlight new services or promotions. Content marketers can also attract customers by creating articles or videos offering solutions to problems. Value-based content will resonate with customers and solidify your status as an industry leader.
For existing customers, valuable content offers reasons to maintain a relationship with a brand. A prime example is email reminders — anyone with a Netflix subscription will receive updates about new content that might interest them. In some cases, businesses can highlight their contributions within a certain period. This can include weekly reports of how a service is used, or a cost-saving analysis compared to the competition.
Each of these points — from prioritizing customer service to onboarding, to responding to feedback — highlights a fascinating insight about LTV. If you want to maximize customer LTV, you must find ways to maximize your brand’s value to them. Brands that achieve this symbiotic balance will create a sustainable base of loyal customers.