The lifetime value of a customer is a tricky thing – it depends on your sales process, the product or service and the after-sales process.
The Life Time Value or LTV of a customer is determined on the basis of what they spend on your product or service as well as other factors like referrals, indirect sales, and more.
Effectively, if you have the LTV for your business figured out, you can find ways to improve that numbers and provide more value to your customers in exchange for higher revenues.
Here are how some of the world’s strongest brands increase their customers’ LTV.
Convenience is the Name of the Game – Starbucks
A name associated with incredible marketing campaigns, Starbucks decided to go the tech-way to increase efficiency of their business and enhance their customers’ experience.
This time, they went with technology – creating a mobile app that allows you to order your coffee before you got to the store.
A large percentage of the US working population stops at Starbucks for their daily cup of coffee.
By providing them with the ability to order in advance, during transit, people were able to simply walk into stores and pick up their coffee, without standing in line.
Everything was paid for online, and there were no queues, no waiting, no searching for change – nothing!
Ease of access ensured that more people were now buying from Starbucks now.
People know that the time they would have wasted waiting for their cup of coffee – time they couldn’t afford to waste – was no longer an issue.
Gamification to Change your Underwear – MeUndies
There are referral programs and there are gamification solutions – MeUndies is a company that has always tried to get to the next level and they might have something working for them.
92% customers trust the recommendations of people they know, and that brings us to the referral program that MeUndies are running.
They offer a 20% discount on your first purchase if you are referred to the store by someone.
The person who refers you also gets something in return – $20.
That’s for every referral!
Then there’s the gamification bit – you can see how far your referred-friend is on the sales process and how far you are from getting your 20-bucks.
If they stop along the way, you can nudge them along and get them to hurry up.
Their new method has allowed them to lower cart abandonments by giving existing customers a stake in referred customer sales.
Do you Support Mac or PC?
Did you ever think of picking a side between Macs and PCs before the Apple ad-campaign came out?
Did you even think that there was such a thing as loyalty to a particular brand?
We’ve all bought Nike shoes and wore them with Adidas t-shirts.
We’ve all had Coke and, when there was no option, picked Pepsi.
In a lot of walks of life, we never knew we had the ability to be loyal to one product or brand to the extent of going out of our way to ridicule the other.
Apple made it possible!
With their “Mac vs PC” advertising campaign, Apple made people pick sides.
The campaign was quite tongue-in-cheek and not entirely digital – but it kept creating a picture of what the ideal Mac user would look like.
If you wanted to be cool, calm and loved – you needed a Mac!
Are Apple products better than their competition?
No – as a matter of fact, Apple products are made of parts their competition makes.
However, they have created the perception that Apple products are better by selling a lifestyle and a persona.
An Apple customer is sold on a lifestyle, not a product – now that’s what you call creating Life Time Value for a customer.
Obvious Solutions – Subscriptions on Amazon Prime
Everyone has a subscription model – it is one of the most common revenue models businesses use to create LTV from their customers.
However, Amazon sells commodities and when you’re buying a product, you don’t expect subscription fees.
After all, you wouldn’t have subscription fees with the local grocery store, would you? You would pay as you bought something – simple.
However, Amazon decided to start Amazon Prime as a way to provide customers with faster delivery of products that they had bought on Amazon.
There was a lot of shouting and screaming about dual-standards, but when people began buying regularly on Amazon, the subscription began making a whole lot of sense.
For people who were buying one-time from the company, Amazon Prime was an overpaid, surplus service that they would never need.
However, if you were buying regularly from the website, you would love the lower shipping costs and faster delivery time that came with the subscription fee.
Now, Amazon has added a whole lot more to their subscription – thereby enticing more people to take up a Prime account and get access to free music, TV shows and more.
Tell us how you are helping your company improve Customer Life Time Value!