6 Ways To Increase Your Customer Life-Time Value

The way that a brand goes about calculating and improving the value of its retained customers can make a big difference in how its repeat clientele impacts its bottom line.


It simply is the total financial value or worth of a customer to a business over the entire length of their relationship.

That is why this Value is at the basis of the classical business concept that retaining a customer is significantly more valuable than gaining a new one!  The average value of a retained customer can vary but it is estimated to be at least five and as much as 25 times greater than acquiring a new one, depending on the type of product or service.

In his book The Hawke Method, Erik Huberman breaks down his “Three Principles of Marketing” which start with awareness, aiding customers in discovering a brand. However, the second two principles, nurturing and trust, both revolve around the concept of a customer’s lifetime value. Both Nurturing and Trust have to do with consistency in expectation as a customer continues to interact with a company over time, as well as with the effort that companies put into retaining existing customers as they go through the customer journey time after time.        


For many companies, this Value is the only metric that matters! This is because CLV shows a company how long it takes to recoup the investment that goes into acquiring a customer in the first place.

There are three basic steps to figure out a CLV:

  • Calculate the average purchase value of each customer
  • Multiply the average purchase value by the average number of purchases made to determine initial customer value.
  • Calculate the average customer lifespan and then multiply that by the initial custom value.

While this process varies with each business, it’s well worth the investment for all companies to ensure that a company is maintaining profitable customer relationships over time.


Here are 6 recommendations for ways to improve your CLV by either gaining more revenues from them or by reducing the costs of maintaining their relationship:


Anything from a thank you letter to a personalized customer service experience, to addressing emails on a first-name basis can make a difference in your CLV.

Any time a highly personalized element can be added to a business interaction, it fosters a sense of respect and appreciation that can turn customers into advocates for your brand. 


Your Customer Service is particularly important when it comes to repeat customers. It is one of the primary touch points where you will continue to interact with clientele who are already familiar with your brand.

That is why establishing a customer service department that can provide prompt, polite, respectful, and competent service is of the utmost and critical importance. The function of this critical department and process should be appreciated as a fresh opportunity to encourage repeat business every time a customer makes contact with your brand.


There’s nothing quite like shining a spotlight on someone to make them feel special. Companies can do this with their loyal customers in a variety of ways.

You can call out a customer in a social post or email newsletter. Or, you can ask them to write reviews and then respond to their feedback. You can even make a public display out of taking an existing customer’s advice.

Featuring customers alongside your company doesn’t just humanize your brand. It can also go a long way in developing individual loyalty and interest from those included in your conversations. You may even benefit from some social proof as others see you focusing on real-life customers.


By offering rewards to existing customers, you show them that you want to honor their continuing patronage. This can also expedite their next purchase, increasing their overall CLV in the process.

Rewards don’t have to be massive. It can consist of something as simple as a targeted coupon or special early-bird access to an event. If you’re serious about investing in your past customers, though, you can also go for something bigger, like a full-blown rewards program.


Another great way to improve CLV is by getting your customers themselves involved in improving the statistics. This may sound complicated on the surface, but all it takes is a good referral program.

Using a referral or affiliate program allows your customers to use their past experiences to convince others to join your brand. This has multiple benefits. First, it reduces the effort needed to acquire new customers, thus reducing the costs involved with their overall CLV. It also encourages existing customers to continue to patronize your brand, as it’s on their minds more often.

There are many referral and affiliate program SaaS platforms out there, at this point. All you need to do is set one up, create instructions to join, and spread the news. Your satisfied customers can take it from there.


If you want to increase CLV, you need to think about the beginning of the process. The way that you acquire new leads, cultivate them, and turn them into paying customers can say a lot about how valuable those customers end up being.

If your average customer’s initial impression of you is sub-par, it can reduce the number of first-time buyers that return to you in the future. If your onboarding process — like selecting a product, paying for it, or learning how to use it — is tedious or confusing, it can put a bad taste in peoples’ mouths.

Make sure you’ve perfected your initial interactions with new customers. The goal shouldn’t just be to complete a transaction. It should also include creating a positive impression of your brand as a whole. That way, each time you come up, it evokes a desire to repeat the experience and tell others about it, rather than the opposite.

Boosting Your Bottom Line Through Your CLV

If you want to establish sustainable, long-term profitability, you have to think about your customer lifetime value.

Start this process by making sure that your entire team is aware of the importance of CLV. Then, calculate your current CLV to see how much effort you’re putting in and how profitable (or not profitable) that effort is.

From there, look for ways to improve your CLV, so that you can turn each acquisition into a prolonged and profitable relationship that benefits both your customers and your bottom line for years to come.

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