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How to Increase Your Customer Lifetime Value

How to Increase Your Customer Lifetime Value

December 19, 2021
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Did you know that an engaged customer-based company can expect up to 80% of its sales targets with only 20% of the total customers? This is why a brand must be competent in identifying its most loyal clients. Instead of wasting valuable marketing and advertising budget, investing wisely in rising Customer Lifetime Value (CLV) is more beneficial.

Ideally, you want a simple and easy-to-understand explanation so you can follow along. We'll share some practical tips for increasing your customer's lifetime value.

What is CLV?

CLV refers to the overall merit a customer generates for the business during the customer-business relationship. Let’s dig into this simple example: Let’s say you spent $1000 to gain new clients (this could be a budget for advertising, marketing, etc.) and obtained five new clients.

In this case, the Customer Acquisition Fee is $200 per client. Then, for the next four years, one of your clients spends $250 per year. The CLV of the client is $1,000. However, you must spend $200 to acquire that client. So, his total CLV is $800 ($1000 - $200).

The preceding case may appear to be a simplified math formula. Calculating and increasing the Customer Lifetime Value, on the other hand, is an essential measure for the growth of your business.

How to Increasing Customer Lifetime Value

A high CLV means your company will get more profit from each client. Each client becomes more valuable. This means you can spend more money on acquiring new clients while retaining existing ones. Below, we’ve listed five ideas on how to increase your average CLV.

1. Upsells & Cross-Sell

Re-engaging or upselling existing clients is much easier than bringing in new clients. Consider offering additional products right when your customers are ready to buy. This trick may be familiar to you, especially in E-commerce. Upselling and cross-selling are strategies that have proven effective in encouraging clients to purchase more expensive or even multiple products at once instead of lower-cost choices.

2. Promotional Offers

Sales promotions are an excellent way to attract consumers to shop for more products or services. You don't have to offer large discounts. Make your promotions unique. We've compiled a list of popular sales promotions to point you in the right direction:

  • Discounted products
  • Product giveaway
  • Free returns
  • Free shipping
  • Flash sale
  • Competition
  • Buy more, save more
  • Holiday promotions

3. Email Marketing

If you run a business, keep this in mind: email is by far the most effective way to reach out to people who have shared an interest in your product or website. Why?

  • It is much more effective than social media for customer acquisition.
  • It is both economical and cost-efficient.
  • It's exceptional and customizable. Emails can be conveniently scheduled in advance, eliminating the need to write every week.
  • It's indeed action-oriented and measurable.
  • Mobile devices enable people to check their email on the go.

4. Loyalty / Rewards

Customers show their support by purchasing from you, and loyalty rewards assure that they will be receiving something in return. Arranging a customer loyalty system or providing reward points is a savvy way of encouraging customers to return frequently. Here are eight advantages of a rewards loyalty program:

  • It increases customer retention.
  • It increases the Customer Lifetime Value.
  • It creates a greater chance of repeat business.
  • It increases revenue.
  • It improves customer relationships.
  • It distinguishes a brand from its competitors.
  • It promotes word-of-mouth marketing.

5. VIP Customers

VIP customers are your direct-to-consumers who are the lifeblood of your business. Think of them as your most eager customers to be informed about company updates, sales, promotions, new product launches, and special events.

You need a specific strategy to engage with your VIPs to influence brand affinity, retention, and repeat purchases. Here are some of the best VIP strategies that'll make your VIPs feel special:

  • Early access & exclusive events: Let them know that they have exclusive access to your special sale. This strategy works best through SMS or email.
  • New collections & sneak peeks: VIPs need to feel extra special. Let them be your priority to new product launches or sneak peeks.
  • Points: Consider developing a system in which they can sign up to earn points. They can redeem gifts, discounts, or other offers once they get a certain amount of points. This is an excellent way to encourage your most loyal customers to make their upcoming purchases.

Consider including an expiration date to create a sense of urgency. It is more practical to encourage customers to use their points rather than collect them for an extended time.


Customer Lifetime Value is a crucial metric for your business. If low CLV is too predominant, there are numerous issues that must be addressed immediately. On the other hand, you need to maintain engagement with customers with medium and high CLV. Give them special treatment to keep them as loyal customers and increase your average CLV.


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