"Within one month our revenues had jumped over 50%."

4 Tips On How To Increase Customer Lifetime Value

4 Ways to Increase Your Customer Lifetime Value - Blooming flower

Let your customers bloom.

Loyalty marketing programs are all about retaining customers and converting them to your brand.  But these programs can be completely ineffective if they are not focused on what the customer wants and how to give it to them.  Using obscure prizes or inconvenient rewards will not help you in the world of customer loyalty.  You must first understand your customers, and then find a way to give them what they want most.

Who You Should Be Rewarding

Many loyalty programs have proven to be ineffective because they don’t reward the customers who are the most likely to stick around.  Before you start a program, you must first determine who is most likely to participate in your program, and who is likely to be converted to your brand or product.  In order to do this, you have to understand who your customers really are.  Once you have determined the demographics of your customer base, you can then work to determine which of your customers will turn into profitable ones.

When You Should Be Rewarding

Modern day culture is quickly turning into a society where it is believed that every action should be rewarded. This is not true in the world of customer loyalty.  You don’t necessarily have to reward customers every single time they do what you want.  Avoid rewarding customers for purchases that would have been made anyway.  An obvious rule to go by is to reward spending when it promotes an increase among your most profitable customers.  Those customers who cause you to break-even or are unprofitable to your company will not help you to boost profits when they are rewarded. 

Where You Should Use Rewards

The world is increasingly becoming more reliant on computers and the Internet, and your business and loyalty programs should work to do the same.  Interacting with your customers through social media provides a valuable way to get feedback and input from the customers who are the most invested in your brand or product.  Simply communicating with customers through comments and emails is a great way to reward your customers for remaining true to your brand.  Studies have shown that more customers value a response through a social media outlet than even a tangible object.  Ignoring the valuable uses of social media can put your business at the back of the line for profits. 

How You Should Reward

Perhaps the most important factor in building a loyalty program is determining how to reward your particular customers.  Because loyalty programs are still in their infancy stage, many companies are working through a trial and error process to determine what rewards the most loyal customers value the most.  Determining the right rewards for your customers is a matter of studying your customer base and surveying what is most important to them.

A loyalty rewards platform that is set up properly and functions well can increase customer loyalty greatly.  In the process of converting customers to your brand or product, you ensure that you have a high customer retention rate, and that you are able to partake of word of mouth advertising from some of your biggest fans.  Don’t underestimate the importance of your current customers when building your business, as they can be your biggest asset.

About the Author

Dorian Travers is a business consultant and customer relations expert. He helps businesses create profitable customer relationships and loyalty rewards programs.

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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