In recurring revenue models, maximizing customer lifetime value (CLV) is achieved through establishing a lifetime of customer interaction points as each provides an opportunity to win revenue and loyalty. While the previous two posts in this CLV miniseries focused on the definition of CLV and how to boost CLV, today we’ll dive into how to maximize CLV through customer interactions.
The beauty of recurring revenue models is the abundance of opportunities a company has to create these customer interaction points. From an upgrade to an upsell and customer service to customer promotions, there are various ways to connect with customers and maximize CLV.
For example, consider how you can interact with customers after they make a purchase. Remember, a key tactic to increasing CLV is a focus on recurring revenue rather than one-time sales transactions. So rather than simply sending an automated summary of the purchase, build in some personalized recommendations for other products. While they may not purchase another item at that exact moment, 84% of customers report that personalization impacts customer retention and loyalty. They are more likely to purchase from you again in the future when they feel a personal connection.
CLV plays a major role in determining the success of your recurring revenue system so make sure you’ve identified and maximized all the available opportunities.