CLV
What is CLV (Customer Lifetime Value)?
It is a measurement of customer value. This metric allows determining what revenue each customer generates. Thanks to it, we can determine the numerical value of a business relationship with a given customer. CLV refers to the entire duration of the relationship.
There are several ways to calculate CLV. One of them is multiplying the average order value, average transaction frequency, and retention period (the time when the Customer remains loyal to our brand).
How can we increase customer lifetime value?
Try to increase the average order value (AOV).
How?
offer free shipping from a specific order amount,
offer additional discounts or freebies for larger orders,
display purchase suggestions, e.g., related products,
use the scarcity principle - clearly inform about an ending promotion or low product availability to speed up the customer's decision.
Try to increase the average transaction frequency.
How?
introduce discounts on subsequent orders,
personalize content/ads targeted at specific recipients,
adjust proposed products and discounts based on previous purchases,
use retargeting.
Try to extend the customer retention period.
How?
introduce a loyalty program,
engage your recipients, e.g., on social media (surveys, contests).
Read also:
Useful links:
https://www.callpage.pl/blog/customer-lifetime-value
https://www.conversion.pl/blog/customer-lifetime-value-clv-ltv-wartosc-zyciowa-klienta/#wzor