How to Increase the Lifetime Value of Your Existing Customers
There are three basic ways to increase your revenue:
Sell to more people
Sell more expensive things
Sell more things to your current customers
B2B business owners - diamond wholesalers, jewelry manufacturers, technology providers - listen up! This applies to you EVEN MORE than it does to jewelry retailers, even though I focused on them in the video above. Retailers get it, a bit more than B2B companies do.
The most overlooked, under-used one of the three ways to grow your revenue is #3:
INCREASE THE LIFETIME VALUE OF YOUR EXISTING CUSTOMERS
Focusing on serving them is the lowest-cost way to increase your revenue, too.
How do you know if you are not investing enough time in your current customers? Ask yourself these two questions:
What is your Average Order Value (AOV)?
What is the Average Lifetime Value (ALV) of a client to your business.
If these two numbers are similar, you need to invest in encouraging repeat purchases. Why?
It costs a LOT more to acquire new clients - think networking, think relationship initiating, think digital marketing, paid advertising, discounts on first purchase - than it does to deepen and develop relationships with your existing customers so they return for multiple services or purchases.
One of our client's AOV and ALV numbers were nearly the same. This told us they needed to invest in:
- Client loyalty programs
- Personalizing service and communications to delight clients and engender loyalty
- Developing a product offering that would meet their NEXT fine jewelry need: e.g. If they bought wedding bands, next offer them anniversary gift items, followed by birthday, anniversary, birth of child, etc.
- Getting permission to continue communicating with them directly. Incentivize newsletter subscriptions and social following to continue communications on important events like anniversaries, children's birthdays, etc.
The good news is you have a HUGE opportunity to serve your existing clients better and be ready with the next purchase or service that will solve a problem or create an opportunity for them.
What we find as we serve our B2B clients is that they are still operating ANALOG in a DIGITAL world, wondering why their cold calls, prospecting emails, and blind LinkedIn offers are being blanked. Many B2B business are not leveraging the tools available today to initiate and deepen relationships BEFORE they attempt to sell something - a fatal mistake.
We must give to get. And we must have access and a relationship to understand what the problems are that our business can solve for another business.
The basic steps are:
Identify who you want to serve.
Follow them personally, and their business, online on social, in the news, in the trades. Become an expert at what their business is doing and may need.
Reach out to share relevant articles and thoughts on social - NEVER to sell your products or services.
Open a conversation of mutual respect and learn what - and IF - you are actually what they need BEFORE offering your product/service.
There are software and online tools to automate and facilitate all of this. Sales Navigator lead lists will alert you every time your desired client posts or their company does. Newsletter software like Klaviyo will tell you who opens and goes to your site AND what pages they are interested in.
And before you dive in to those and many others we recommend, you will need to level-up the way you, your team and your business appear online, on your social media, on LinkedIn, on your website, so that when you do get their attention by offering your valuable insights, inspiring them to take a look at you and your business, you put your best foot forward.
Update your image on LinkedIn, or if you’re like many, ADD your image(!) - mostly your head, eyes forward, pleasant expression. Provide consistent messaging about what you and your business do and for what types of businesses. Take a stroll through ALL the places your business communicates online and be sure the look, feel, colors, fonts, messages are all consistent. This provides a reassurance that engenders trust intuitively from your potential buyers. The opposite makes you and your business look disorganized, aimless, and scattered - not the partner a major buyer would want to have.
Start where you stand, begin by addressing the starting points and basics we’ve listed above. Then you’ll be ready to share a Standard Operating Procedure each of your sales and marketing team will follow that can be monitored monthly for progress towards your customer-winning goals.
From there, you can create strategies for acquiring new buyers and selling higher priced products and executing on all three fronts simultaneously.
Happy revenue building!
https://www.youtube.com/watch?v=_BjMH-F2ZE4