How to Organically Maximize Your Customer Lifetime Value

Customer lifetime value (LTV) is one of the best indicators of success in a growing e-commerce brand. Total revenue is, of course, what will most directly affect your bottom line — but guess which metric most affects your total revenue?

For more detail on why customer lifetime value is critical for e-commerce profitability and how to calculate it, see the Maximize LTV section of our E-Commerce Guide to Profit & Growth. Here, we detail some of the most effective tactics for maximizing your customer lifetime value as you grow your e-commerce business.

Most of these tactics simply require a shift in how you organically interact with customers; some use customer data or affect marketing strategies. Whatever the case, take a step-by-step approach to maximizing LTV and test as you go.

Organic Customer Lifetime Value: Make Brand Loyalty a Primary Goal

We’ve said it in our Profit Guide, and we’ll say it again: to succeed in the long term, you need to make a brand that is going to inspire customer loyalty.

Invest in content that tells a story. Ask how you can deliver top notch customer service from the very beginning. Involve your customers in your growth with personalized offers and featured customer stories.

Focusing on customer content is a good way to show your audience that you put them first. “Put [customers] in the spotlight and let them know how much you appreciate them,” internet marketing guru Neil Patel tells us. “Once they see the reciprocity, they’ll make your brand a priority and become one of your most valuable marketing assets.”

Authentic advocacy is more difficult to track than paid impressions, but you’ll know it when you see it. And it will have the biggest impact on your long term growth.

Make Buyer Personas

Even the most specific niches will have different types of customers. To make the most of who is naturally drawn to your brand, you need to understand who they are, what they want, and why they are there.

This is why you build buyer personas. “A well-crafted buyer persona (or customer persona, audience persona, or marketing persona) allows you to personalize your marketing on a large scale by humanizing core target groups of your customer base,” writes Christina Newberry for Hootsuite. “Understanding your buyer personas allows you to understand the best ways to reach each of your different customer groups.”

As you gain better understanding of how to reach different customer segments, the LTV of each group should rise as well.

Newberry recommends starting with looking at your current customers: who is currently buying from you and what do they look like? Who are the most valuable customers by LTV? The OrderMetrics platform can help you sort customers out into groups based on LTV, which can serve as the foundation for new buyer personas.

Make Marketing Channels More Efficient

Are customers coming from Google Ads more valuable than customers coming from Facebook Ads?

If that’s not a question you’ve considered, take another look at our Profit Guide on optimizing paid marketing: by figuring out where your top customers are coming from, you can decide how to improve your ad targeting to attract more people like them who will love your brand and spend more cash.

The number of clicks you get on a social ad or paid search ad isn’t a great metric for measuring the profitability of the ad. Click through rate can tell you how many people come to your site from your advertising efforts, but it can’t tell you how many clicks translate into a purchase or which marketing channels yield the best customers.

Maybe Google yields more traffic but fewer sales on your site, while Facebook yields a smaller group further down the sales funnel because of the social proof they see. Or maybe the reverse is true — you won’t know until you engage in profit analytics.

Of course, you can make tweaks to your ad campaigns on each platform to improve initial metrics. But you should also make a careful comparison of which marketing efforts actually lead to more sales and return customers.

Make Customer Service a Business Pillar

One of the most organic and longlast ways to maximize your customers’ lifetime value is to show them that they are the priority.

51% of customers will never do business again with a company that provides them with a bad customer service experience. You need to ensure your chatbots or auto replies, as well as call lines, are stacked with positive and informative people that create amazing experiences on your behalf.

“Customer service strategies are often built to mitigate loss, not to encourage growth, but both are equally important,” writes Jerry Kelly in a Forbes Council post.

In other words, customer service isn’t just a way to respond to negative experiences; it’s also a means to foster loyalty and increase your customers’ lifetime value.

Make Customer Transactions Easy

How many steps does it take your customers to check out on your e-commerce store? 74% of consumers scrap a product or service if the online checkout is too long or complex.

Keep checkout as easy to navigate as possible for your customers. You might get that first purchase, but a painful checkout will definitely stop someone coming back again. For return visits, make checkout even more streamlined: save customer information, send personalized offers and reminders, and make it easy for them to use coupon codes.

Make Use of Your Customer Data to increase Customer Lifetime Value

Through each of these steps on your path to increasing customer lifetime value, you should make data the center.

You can use rich customer data to build those buyer personas and conversion data to optimize those marketing channels. Data is at the center of personalized offers, drip campaigns, ad retargeting, abandoned cart emails and more. As an e-commerce brand you have access to more information than any brick and mortar retail store in history — and you should be making good use of it.

Yes, it’s less organic than shoring up brand loyalty or adding personal touches to customer service. But making good use of customer data can feel organic to your loyal following if done right.

With the right integrations, you can use data to see how each decision (no matter how small) affects the lifetime value of your customers. With better LTV comes better profitability.