Increasing customer lifetime value

It’s so easy to live and die in the 20k-75k range for a handful of reasons. Your bills are paid, your margins are cool, and your system works. Of course, you want to scale, but that fire you had when you started just isn't as hot as it used to be.

Think of customers as heat, and your business is fire. This post is made to be the gasoline. You can pour a little bit of gas on your fire and your flame will jump. Instant but temporary heat. But consistently doing the 3 things that I’m going to mention below is like dumping an endless supply of gasoline in your fire pit. Eventually, you'll end up with a fire so big that it will probably spread and grow on its own. You can build a heat source that never dies.

Here are 3 things you can do to double the lifetime value of your customers:

1. Order Personalization – I’ll start here because most people underestimate how important it is to make people feel like you care about them. A personal touch goes a long way. It's important to connect with customers on a personal level. I’ve said this before but I’ll say it again. You sell as a person, not as a business. I'll give you an example of exactly how to do this.

So I have a client that sells niche-specific hats. He went from his customer service email inbox being filled with order-specific questions to an inbox full of people telling him how much they love his brand. He didn't change his products, he didn't fix his slow shipping times but he did start writing handwritten messages and putting them in the boxes of as many orders as he can. This alone can literally double your customer's lifetime value if you do it right. The message needs to be personal. You know where they live, you know what they bought, and you know their names. That’s more than enough information.

Here’s an example of what you can write (product in example: golf hats):

“Thank you sooooo much for another order Mike, I’m so grateful for your support. Good luck at your next Golf Game!”

21 words, 30 seconds of writing, You just guaranteed that this guy will either purchase again or refer a friend to your brand.

P.S. People love messy handwriting. It just feels more real. You’d be surprised by how many people will message you saying they’ve never received a handwritten note with something they bought online in their life.

There are a lot of ways to personalize orders. But I hope that example gave you the jist of what I’m trying to say. You personalize the order in a way that makes the customer feel special. They should know that their order is different from everyone else order.

2. Rewards programs/Ambassador programs– This is very simple. Humans are dopamine addicts, we don't do anything unless it makes us feel good. Fuel your customer's dopamine addictions by rewarding them for giving you their money.

“Congrats! You just spend $400 on my store, here are 40 reward points equivalent to 40 cents that you can use toward your next order!” This sounds insanely stupid when you put it this way. But people will use the fact that they have some type of personal credit or discount as an excuse to buy from you again. Just seeing points being loaded onto their account is an instant dopamine hit. It's like leveling up in a video game. The achievement is pretty much worthless, but it cost you something so it has value to you.

3. Post-purchase follow-ups – Your repeat customers help you pick up momentum without you spending more money on new traffic. On smaller stores, you can have 1-2 customer thank you flows. On some of the bigger stores I work with, we’ve built 6 of these flows. Yes, 6 automated post-purchase email flows. Every time someone buys, the language you use when you communicate with them slightly changes. People who purchase once should know how much you appreciate them. If they purchase 2 times, they should know that they are so close to becoming a VIP and that it's in their best interest to buy again. People who purchase 3x are VIP customers and they should know and be rewarded. People who purchase 4x+ should get even more perks and maybe even a gift. Make sure to implement a survey in the later flows to find out why your repeat customers keep coming back. 9/10 times they will have a personal reason like “You guys actually reply to my customer service emails” or “You guys keep giving me gifts with all my orders” or “I’ve seen the founder come a long way, I love the products and I want to support the company.”

Think of the first sale as your customer entering a new sales funnel. Now you get to persuade them into making more purchases by making them feel appreciated and special. Why would anyone buy from your competition when they are already VIP customers with you? Just the idea of not knowing what the reward will be after they make another purchase is enough for someone to make a purchase with you again. Make the reward for making a purchase unpredictable. They should have no idea if they're going to get a freebie, a discount, or a virtual high-five when they place an order. But, no matter what, they should know that they are appreciated.

I’ll end this by talking about one of my favorite shows; Shark Tank. I always remember how excited Kevin O’leary became when a business owner came in and told him that their average customer converts twice in a 90-day period after the initial acquisition. He essentially told the entrepreneur that if he could sustain this trend he’d never go broke. This has pretty much lived in the back of my head ever since I watched it. I have no clue what episode it is, or what business it was but it's ingrained in my mind. It’s an undoubtable sign of a really good business.

If you have other ideas about how to increase customers lifetime value I encourage you to share them. These are just 3 examples that I’ve seen work in real life but the possibilities are endless when you connect with your customers on a emotional level.