How Data Can Help You Improve Your Customer Lifetime Value

How Data Can Help You Improve Your Customer Lifetime Value

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It’s just as important to keep your existing customers as to acquire new ones. In fact, some market leaders argue that customer retention is even more important because it’s a cost-effective way to drive business growth and build brand loyalty. Therefore, you should focus on your customer lifetime value (CLTV).

This is where data becomes indispensable.

You can fine-tune customer retention by collecting and unifying data and then using this information to orchestrate a tailored customer experience. This can ultimately help maximise how much your existing customers spend with your business.

There are many ways data can boost your CLTV, and this is what we’re going to talk about here. Let’s get started.

Different Ways Data Can Improve Your CLTV

Prioritise your high-value customers

Your high-value customers are the ones who buy your products at full price. They make multiple purchases over a particular time period. And their average order value is higher than your median. Put simply – they bring in more business in the long run. They naturally have a high CLTV.

By understanding your high-value customers and their behaviour throughout the sales cycle, you can also determine attributes that indicate similar behaviour among your prospects.

You can identify high-value customers by looking at different types of data, including:

  • Historical sales
  • Customers feedback
  • Market research

Data-Driven Personalisation: Secret to Customer Retention

What do the biggest companies like Amazon and Netflix have in common? They are customer-centric brands. They know all about their customers over time, tailoring their services and support accordingly. This is called personalisation.

74% of marketers say they know that an ultimate personalised experience increases customer engagement and brings loyalty. And data is the foundation of personalisation.

Complete and comprehensive data reflects the entire customer lifecycle throughout the sales cycle and from all touchpoints. So, you need to track every interaction, such as:

  • How customers use your products or services
  • When a customer contacts your support team
  • If a customer engages in a live chat or via social media

A complete set of data provides the whole picture, thus laying the foundation for effective personalisation.

Rich customer data tells more about your target audience, and you can use this information to reach them with personalised content. This data can be broadly segregated into four categories:

  • Demographic data: Age, income, gender, location, interests etc.
  • Behavioural data: Customers’ behaviour to businesses in your industry and their reactions to your marketing advertisements
  • Transactional data: Purchase history, how much they are likely to spend, factors influencing their purchase decision
  • Financial data: Cost of investing and selling, including customer profitability and return on investment (ROI)

By leveraging this information, you can enrich their experience with your brand, turning them into long-term loyal customers.

Capitalise on the Subscription Economy

Nearly 70% of business leaders think that subscription business models are key to their company’s success. This trendy and seemingly forever business model generates predictable, recurring revenue. And, if you retain customers for a long time, you can make huge profits from each individual than through a one-time sale.

And data is central to the subscription business model. Here’s how:

Unlike the traditional business model, the subscription business model uses different metrics. These include:

  • Monthly recurring revenue (MRR): Recurring charges are normalised to a monthly value. It helps you see where you can adjust base subscription rates.
  • Annual recurring revenue (ARR): Use this metric to see year-over-year trends and decide your growth goals.
  • Churn rate: The number of customers that terminate a subscription in a particular billing period. Make sure you gather data points on why they unsubscribed.
  • Revenue churn: It’s the percentage of lost revenue from current subscribers in a particular period. 
  • Renewal rate: It’s the total number of subscriptions renewed divided by the total number of subscriptions due for renewal in a given period. A renewal rate is a sign of a growing business.

By tracking and analysing this data, you can drive strategies to improve your subscription model to drive more revenue.

Drive Better Customer Service

Another key to improving your CLTV is to provide exceptional customer service. About 90% of global shoppers say that customer service is important for their choice of brand. So, it’s important to have reliable customer service agents, and having useful data can help with this.

To improve your customer service, you must use data effectively. When analysed properly, data lets you predict what customers want even before they actually want it.

When a customer connects with your service agent, the agent can quickly access the customer’s profile and provide relevant support. Data also helps prevent missing customer communications and enables your team to resolve any issue quickly. 

Also, your customers may face trouble at any time of the day. They may want to reach you during odd hours like early morning or even midnight. So, needless to say, you should try to deliver 24/7 support, and make your response as fast as possible to customer requests. Also, make sure you have a well-trained, dedicated and responsive customer support team, especially for most traffic-heavy channels.

When you’re able to resolve customers’ queries quickly and effectively, you become a reliable brand on the market. This further leads to improved CLTV.

Get Custom CLTV Reports with BeProfit

As you see, data is the key to your business' success. But dealing with a large amount of unorganised raw data can be overwhelming.

With BeProfit, you can easily create custom CLTV reports emailed directly to you. These reports bring you deep-level insights into your CLTV and the overall marketing performance of your business. It highlights conversion rates per platform and identifies your most profitable products and high-value customers.

So, if you're looking to optimise your CLTV and grow your revenue, start capitalising on data. Let BeProfit make things easier for you. 

Simply sign up for BeProfit or ask for a free demo.

How Data Can Help You Improve Your Customer Lifetime Value
All-in-one analytics dashboard to track business profits and expenses

BeProfit is a profit calculator and analytics dashboard for ecommerce sellers, featuring custom reports, actionable profit insights, LTV cohort analysis, and much more, all in one intuitive dashboard.

Download our free whitepaper and gain important ecommerce and marketing insights, directly from Juni.

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Juni will not share your information with any third parties except for our verified partner network. Submit your email for even more valuable content, delivered straight to your inbox.

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