A high Customer Lifetime Value (CLV) eventually increases loyalty. Moreover, your team should focus on customer centricity and acquiring new clients. You can be ahead with a better understanding of what clients want from you instead of just one purchase per user or visitor session on average like some other mediums might promote–such is not always true, though! 

As the cost to acquire customers skyrockets, customer centricity and retention become a top priority for brands. They experiment with new channels as digital advertising uncertainty rises in order to keep their business afloat during these trying times.

The critical way to achieve a high CLV is to implement the customer centric approach to eCommerce sales. Let’s dive deeper! 

Table of Contents
  1. What is Customer Centricity?
  2. The Most Important Takeaways: How to Increase Customer Lifetime Value
  3. How to Calculate Customer Lifetime Value
  4. The Cost to Acquire New Customers Surges
  5. Personalise Your Customers’ Shopping
  6. Create Actual Added Value for Your Customers
  7. Customers Retention Trends | Ways to Increase Customer Lifetime Value in eCommerce
  8. Unique Shopping Experiences with Shopware Guided
  9. Build a Contact Page That Responds Instantly – OMQ Contact
  10. Conclusion of Customer Retention Strategies

“Customer centricity” is also known as “customer focus.” Customer centric businesses focus on the needs of their consumers rather than the selling of their products. Nowadays, client centricity is replacing the once-dominant product orientation; therefore, you should also focus on your consumers.

Due to the enormous number of ecommerce suppliers, fewer and fewer people remain loyal to a brand while purchasing online.

For you as a retailer, this implies that the goal is to provide customers with the greatest possible purchasing experience throughout their customer journey, from the first touchpoint with your brand through purchasing your goods and after-sales care. From your clients’ perspective, you may thereby distinguish yourself from other market rivals in the long run.

What is Customer Centricity?

Let’s start with…

  1. Customer acquisition costs are rising across the board, with Facebook rates returning to pre-pandemic highs.
  2. Consumers and regulators around the world are wary of big tech, pushing Google and Apple to contemplate making it harder to target ads across several platforms.
  3. Brands are experimenting with new channels like voicepowered shopping to address rising acquisition costs and advertising uncertainty.
  4. They’re also putting an emphasis on customer retention strategies, rewarding and motivating current consumers to spend more.

The Most Important Takeaways: How to Increase Customer Lifetime Value

Many eCommerce businesses have found success by working with voice-powered shopping software in a world where customer acquisition expenses are high, and advertising uncertainty abounds. This software allows customers to find whatever they want without having to rely on an online retailer or store, allowing them to avoid being tracked through their browsing habits, which could eventually lead to personal information like email addresses being stored on file servers that are hidden from public view (or even worse).

This unique use case is gaining traction because it allows both parties—the brand and the consumer—to contribute value, as opposed to the standard “pushed ad model” prevalent today, which often benefits only one party: platforms like Facebook, which profit from advertisers’ spending.

You may calculate lifetime value by gathering information on how much you’ve spent and how much you’ll make in the future. It will not be easy, but it will be worthwhile. The following formula, for example, can be used to calculate LTV:

How to Calculate Customer Lifetime Value

Lifetime Value = Average Annual Profit per Customer / Churn Rate

In general, the lower the churn rate, the more money an average client spends. This is because it feels right for individuals to stay loyal to a company if they can make more money by doing so.

Customers’ value may also be calculated by looking at different kinds of customer segmentation. For illustration, one product may have high acquisition costs but low retention rates, whereas another may have a low price but a more excellent lifetime value (LTV).

Measuring the cost of obtaining a new client is another technique to see if your customer’s lifetime value is worth it. It will not be worthwhile to spend money on marketing to expand your company’s reach if you do not receive high-quality leads.

Simply put, the cost to acquire new customers is surging. It costs a lot of money to attract new customers, so increasing customer lifetime value will be essential to profit.

The cost of acquiring new clients is increasing as a result of the following factors:

  • Due to severe competition from other companies, gaining a new consumer is significantly more difficult nowadays. Your marketing dollars must go far further than they have in the past.
  • Over the last few years, there has been a lot of free or low-cost competition, such as discount websites and social media.
  • People may learn a lot about the items and companies they prefer on the internet. They can also get knowledge about different businesses and how they operate. This implies you’ll have to work much harder to attract clients because they have more options than ever before. For example, there are now review sites where consumers can find out what other people think about how excellent or horrible your service is…things that were previously kept hidden!

The Cost to Acquire New Customers Surges

Customers-Retention-Trends

SOURCE: Shopify

For each of your clients, make a lifecycle map. Measure the time it takes them to make a second, third, or fourth order, as well as the typical chronology in which they buy things. You can speed up those transactions with tailored upsell and cross-sell calls to action.

The more personalised your customer centric approach and the better your products are suited to your customers, the more relevant your business becomes. To provide your consumers with the most personalised shopping experience possible, you must first get to know them. Consumer insights help you understand who your consumers are and what matters to them. The first step toward a more customer-centric approach is gathering and analysing consumer data and information.

Personalise Your Customers’ Shopping

Top eCommerce Trends That will Change Your Online Store Head Over Heels | 2022 Edition Read On

Above all, with eCommerce, you must deliver actually added value to your consumers’ purchasing experiences in order for them to return to you instead of one of the many other suppliers. For example, in a blog with non-promotional material, you may provide crucial supplementary information to your consumers, or on a Q&A page, you can answer the most often asked questions about your goods.

Customer loyalty programs, in which consumers receive personalised offers and invitations to special events, may also provide value to your customers. Customers, on the other hand, gain value from communities where they can share their experiences and ideas regarding your products.

Create Actual Added Value for Your Customers

Customers Retention Trends | Ways to Increase Customer Lifetime Value in eCommerce

Even when customers spend the same amount of money, some customers believe they are not being rewarded. Customers may return to the business because they do not want other persons to benefit from a reward that they do not have.

Begin a rewards program to increase customer loyalty. Customers that sign up are 47% more likely to make another purchase.

  • Integrate incentives so that they may be quickly redeemed at the checkout.
  • Create loyalty levels that reward you with more significant incentives for making further purchases.
  • Make reward points instantly redeemable.
  • Provide VIP, exclusive, or early access to new goods.
  • Enrollees should be given automatic admission into sweepstakes.
  • Invite people to earn points by becoming members of your customer advisory board and telling you what they like and dislike about your product and brand.
  • In order to show how soon an offer expires, use limited-time points, discount coupons, or even a countdown clock.
  • Through referral programs, you may convert brand fans into a sales force.

Convenience and Rewards Systems

How-to-Increase-Customer-Lifetime-Value

SOURCE: Shopify

It’s a fantastic idea that promotes customer loyalty. Don’t be shy about it; customers like it, even if they are aware that they will be paying a little more. Consider that almost 90% of purchasers who have previously received such a reward are more likely to buy from the company again in the future. You may include complimentary gifts from old stock, new product testing, little cards, and other trinkets with sales beyond a certain threshold.

It may help you increase your average order value (AOV) and form an emotional bond with your customers, both of which will lead to repeat orders. If your company sells a number of brands, get samples from your suppliers to assist promote their brand and product line.

Offer Various Freebies

Returns policies are one of the essential concerns and challenges faced by eCommerce companies worldwide. According to Paazl, it directly influences profit margins, and whereas return rates to brick-and-mortar stores are around 8%, return rates to internet stores are over 25%.

You surely want to make your clients’ shopping experience as pleasant as possible, and as you may be aware, over 80% of purchasers want free shipping returns. However, it would be best if you properly considered all of the elements in order to remain competitive in the market and make a reasonable decision. Look at what your competitors are offering their consumers and come up with solutions that will benefit both you and them.

Increase Confidence Through Returns

Shopware 6 - Shopware Store Development

Shopware Guided Shopping allows you to create one-of-a-kind shopping experiences. Unique and vibrant buying experiences that were once impossible are now feasible thanks to current technology, such as customer-centric and interactive live video events enabled by Shopware Guided Shopping. Guided Shopping is a cutting-edge Shopware 6 feature that allows you to host interactive live shopping events in your store.

Unique Shopping Experiences with Shopware Guided

Shopware Guided Shopping: Utilise the Cutting-Edge Technologies to Double Conversion Rate Dive Deeper

OMQ Contact is a contact form that is automatically generated. By automatically responding to client inquiries, OMQ Contact provides the fastest service and prevents the development of tickets. 

Artificial Intelligence recognises your customer’s worries and offers an appropriate response while composing the message. Each request teaches the program something new, and it improves with time. For example, AI recognises that the phrase “my bow broke” means the same thing as “How can I claim my spectacles if they are damaged?”

Other advantages include:

  • Answers in real time on the contact form
  • The AI is aware of the customer’s concerns
  • Adapts to a company’s corporate identity

This ends our look at eCommerce customer retention strategies, trends, and customer centric culture. If you’re having trouble keeping customers, it’s time to experiment with new channels. You should concentrate on your current consumers and implement the various techniques outlined above.

The following are some of the ways you may use to boost your LTV:

  • Increase your focus on your clients’ requirements to make them a priority.
  • By using incentive systems, you may provide them with the utmost ease.
  • Upsell your consumers by giving them some goodies.
  • Returns can help you build trust in your transactions.

Our team of business and technology consultants can help you overcome technical problems in your online or offline business, while also positioning your brand for success. Click here to contact our team of eCommerce specialists.

Conclusion of Customer Retention Strategies

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Aleksei Tarasov

Adobe Commerce Business Practitioner
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