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How To Increase Customer Lifetime Value To Maximize Your Revenue

Kazi Nazia

Content Editor

Increase customer lifetime value for revenue maximization

Do you find yourself chasing down new customers because current customers aren't sticking around, and you need to keep your eCommerce business afloat? Is it a sustainable strategy to run your eCommerce business?

We hear you saying no because it actually isn't. It's time you need to focus on Customer Lifetime Value (CLV).

In this competitive narrative, you can't really go far by keeping on investing in getting NEW customers rather than keeping your OLD customers. What you really need to concentrate on is maximizing your revenue from your present customers. And this is where customer lifetime value comes into play.

According to Tim Cameron Kitchen - CEO of Exposure Ninja, "In order to increase your customer lifetime value, you need to pull two levers. One, increase the number of purchases. And two, increase the purchase value of each customer. And of course, a good business will have a combination of both of these levers."

We want your business to have high customer LTV. So we noted down a series of pointers that you could follow to increase your customer lifetime value and higher profits. Before we dive into the strategies, let's start with the basics.

What is Customer Lifetime Value (CLV)?


According to Omniconvert, "customer lifetime value (CLV) shows how much revenue a business can expect from one customer compared to how long the company predicts that customer will stay."

Customer lifetime value is an important metric for eCommerce brands to measure the average accumulating total of their purchase for some time.

Lifetime value helps you determine if your business will scale the ROI from marketing. It also helps you evaluate the retention strategy depending on how low or high your LTV is.

How To Increase Customer Lifetime Value

You can increase your customer lifetime value by either increasing your Average Order Value or Average Purchase Frequency. An increase in either of these metrics will rise Customer Lifetime Value. Apart from that, let's take a look at the other ways to increase CLV.

Improve Your Customer Support

Treating your customer right is the core to increasing customer lifetime value. According to Tim Han, an international speaker and author from success insider - "treating your customers like family is the key to recurring customers."

Now we're not telling you to turn a blind eye to their red flags and keep on supporting them. But we definitely recommend you to go a bit above to give them special treatments. In fact, according to research from PWC,  86% of buyers are willing to pay more for a great customer experience. So enhancing your customer support is an absolute must.

A solid customer support strategy includes attention to the customer pre, mid and post-sale. Your customer support should cater to your customer at every stage of their buying journey. A great way to make sure your customer's queries are always answered in no time is by using an AI-powered chatbot. Having a live chat available can turn a customer question into a sale or complaint into a resolution. We recommend you check out MyAlice as their chatbot can actually automate your entire selling process from start to finish. And the best part is, MyAlice is completely free to sign up!

You need to make sure your customers are returning again and again for the delightful experience you provide.

Send out occasional gifts

Who doesn't like free stuff? Especially when it comes as a surprise from a place you shopped from. We find ourselves leaning towards shops that offer great discounts or free goodies in most cases. And that's because this is a psychological trick that all of us fall for.

Lippincott's creative consultancy provided a scientific and psychological-based study called the "Happiness Halo" - proving exactly that. In the "Happiness Halo," the author stresses, "Appeal to customers' reason and they're yours for a day. Appeal to customer's emotions, and they're yours for a lifetime."

And nothing is more solid than sending gifts to appeal to your customer's emotions. It shows them that you care about them more than just a means of getting some sales.

We're not telling you to send out gifts 365 days a year to every customer for every purchase. But rather, identify your loyal set of customers and potentially loyal customers, and then send out occasional gifts to show them you care.

Nudge Your Customers into Subscriptions

One of the most popular ways (that works) of increasing the number of purchases of your customers is by bumping them into subscriptions. They're one of the new trends of e-commerce. And they can be lucrative enough that we even see big names like GoPro getting into the subscription realm they previously didn't opt for.

You can nudge them into a subscription by displaying a subscription-biased pricing option of your product.

This basically means you will show the pricing option of a one-time purchase on one side. And on another, the pricing option is based on subscription. However, you need to show your customers how the subscription pricing will be more effective and profitable.

This will incentivize them to opt for the subscription rather than going for a one-time purchase.

Another way of getting your customers into subscriptions is by showing the subscription as the default purchase method. And if customers want to go for a one-time purchase, they need to click on that purchase method.

You can do to level up the subscription game by giving them an option to allow your customers to customize the time frame and the amount of product for the subscription. This way, they will not have too much stock of the product based on their lifestyle. And they are less likely to cancel the subscription altogether.

Integrate Add-ons and Upsells

Another great way to increase the average order value of your customers is by adding add-ons and upsells. Big names like GoDaddy GoPro have been using this pricing strategy for years now, which has helped them generate more sales.

Everything that you throw at your customers before and after purchasing the products is for one thing - increasing the order value.

And therefore, there's an increase in customer LTV. Some of your add-ons and upsells features may seem annoying to your customers. But it's a genius idea for your business.

Since you are competing in a very competitive and price-sensitive space, If you want to maximize your customer acquisition, you need to maximize the value of every customer you get through the door.

By doing so, you can save the money that you would have otherwise spent on getting new customers. So you can now invest it in other business activities. Like - marketing. Which will help you build market share without increasing the price of their core product.


— Introduce Premium Versions

Introducing a line of premium versions of the same product can incentivize your customers to opt for better options. But, you need to make sure you can present it in a manner that demonstrates why the premium versions are better than the regular ones.

That way, customers who always want the best of everything are more likely to opt for the premium purchase. The pricing of the premium product will also be higher than the regular, which may be a problem for some of your customers. In such a case, you can introduce split pay for that.

Now split pay is absolutely everywhere and another massive trend of e-commerce over the last few years. One of the biggest players in the split pay market -Klarna, claims to increase the average order value by up to 58%.

Split pay will help you get more sales for your premium products and end up increasing the average order value for your customers.

Drawing Conclusion: Loyalty Brings Revenue

The right customer lifetime value model can boost your company's growth and progress in many ways. It puts more money in your business's wallet by lowering customer acquisition costs and saving money on marketing and sales activities.

Delivering a great deal of value, understanding the customers being in their shoes, prioritizing customer service are what they need to come back to you again and again.

Learn More:

  1. How Customer Service Can Help Sustain Your E-Commerce Business
  2. How To Get Repeat E-commerce Customers: Encourage Them To Return For More

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