Increase customer lifetime value for your ecommerce business

Customer lifetime value (CLTV) is an important indicator of the health of your ecommerce business.

It’s a long-view of the amount of revenue a customer will bring, smoothing out buying patterns and seasonal variations.

When you know which customers create the most value for your business you can expand your understanding of strategymarketingsales, user experience (UX), product preferences, customer service, and management decision-making. With this knowledge you can anticipate trends and plan improvements to your products and services and enhance your overall business model for growth. 

Increasing CLTV leads to higher profits

While the likelihood of selling to a new customer is 5% to 20%, the probability of selling to an existing customer is 60% to 70%. So, when you focus on returning customers you will achieve much more for less effort. 

When you use what you know about your customers’ behavior effectively you will build the foundations of long-term relationships. 

Here are some steps you can take to encourage your customers to increase their CLTV and your profitability.


Some traditional techniques are still the best ways to retain your customers’ interest. Regular digital or printed newsletters and emails, for example, maintain awareness of your brand 

Because your customers have already bought from you, you have valuable information about their preferences, which will allow you to personalize the content and offers you send to them. You will have a much better chance of success, because you are using reliable and accurate information about each of them. 

The important thing is to let your customers know that you appreciate their business and that you have taken the time to create content that will be valuable and interesting to them. 

When you are working with a large group of customers you can test your approach with alternative subject lines, introductions, offers and frequencies to see which generate the best conversion rates. 

Because you are looking at your customers’ complete lifetime, you will need to be aware that their responses will vary, depending on whether they have been a customer for a month or two years. Your engagement with them should keep pace with their changing needs, so don’t treat everyone in the same way.

Use multiple channels

It’s worth spreading your engagement across multiple channels to make the most of your opportunities. 

A simple and cost-effective way to explore the multi-channel potential of your customers is to include links to your own channels on your website and in your newsletters. Track the click through rates (CTR) and experiment with offers and invitations that will help people to feel that they are part of your community. 

Tailor your business model

An effective option to increase CLTV is to transform your product or service into a subscription. Your customers no longer need to think about making individual purchases and you will become their reliable service provider. 

You will gain a regular recurring revenue stream and your customers are likely to pay more, stay for longer, and become more valuable to your business. 

Offer other purchase options

When you are engaged with your customers, you will build trust and confidence. Then you can make recommendations for other purchases they might like to make, based on their buying history.  

For regular customers you can send reminders and tell them what other people buy with their preferred products. You could even offer them a reward for referring someone else to buy your product or service. 

A carefully planned approach to cross-selling and upselling that adds value for your customer can significantly increase their CLTV.  

Customer service

It is worth investing in a customer retention strategy to increase each customer’s overall lifetime value to your business. We know that existing customers are more likely to buy from you than new customers, and it also costs much less to sell to them. 

For example, Disney Parks’ 70% return rate is achieved through a commitment to customer experience. The approach is simple; when people enjoy their visit, they’ll come back for more. Importantly, customers are also happy to spend more with organizations that deliver excellent customer service. 

There are some simple steps you can take to improve customer service, including: 

  • Making a commitment to quality over quantity 
  • Providing positive and proactive responses to requests, questions, and complaints 
  • Delivering value-added content and services 
  • Giving expert advice freely  
  • Introduce a VIP or loyalty program 
  • Listening to customer feedback and letting them know you have taken it into account. 

Customers that receive good service will tell others and become ambassadors for your brand. They are also more likely to buy from you again to receive that same high standard of service, so their lifetime value will increase. 

Customer information

The key to building long-term relationships that will increase CLTV is accurate and reliable data 

When you integrate your business systems you can collect and interrogate data and turn it into insights about your most loyal customers. Understanding their behavior and preferences is the key to extending their lifetime value, attracting other similarly valuable customers, increasing your profitability, and building your brand. 

To find out more about harnessing the power of your customer data to increase lifetime value, speak with one of our experts. 


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