From practice
Imagine you have an online clothing store. On average, it costs you 100 CZK to acquire a new customer. They will buy at least 5 items of clothing from you per year for the next 10 years. If your gross profit is 150 CZK from each sale, you will earn 7,500 CZK from the customer in 10 years. Now subtract the cost of acquiring them, which gives you the lifetime value of your customer = 7,400 CZK.
Our tip
Don’t try to calculate the average CLV for all your customers, but first divide them into individual segments . You can categorize them based on purchasing behavior, for example, which can be helped by RFM analysis .
If you didn’t consider the future value of a overseas chinese in australia data customer, but based your decisions solely on their past purchases, your marketing budget would be much lower. This could lead you to take steps that could ultimately cost you the opportunity to reach customers. For example, lowering your cost per click, which your competition would easily overpay.
The probability that someone who has already bought united states america data something from you will buy from you again reaches 60-70% . While the success rate for new customers is only 5-20%. Statistics show that the path to increasing profits leads through efforts to support the loyalty of your existing customers and reduce their churn. So-called CLV marketing will then help you achieve the main goal – to increase CLV, i.e. the amount that average customers will spend with you in the long term.
Increase CLV with emailing
One of the most effective online marketing tools for customer responsive design: what you need to know retention in recent years has been email marketing, so let’s take a look at 5 ways to use it to increase CLV .
1. Make sure you include a welcome email
With a welcome email open rate of over 91% , there’s nothing easier than spicing up your first email to instantly convince your subscribers that you’re their love brand when trying to improve CLV.