7 Expert-Backed Tactics to Increase Customer Lifetime Value

Customer expectations continue to rise.

According to Intercom’s latest report, 83% of support teams are seeing customer expectations increase, up from 75% the previous year. 

These expectations have a direct impact on retention. 96% of customers will leave a brand if they experience bad service. To increase customer lifetime value over the long term, it’s clear: companies need to bridge the customer service expectation gap.

And yet, as we spoke to the experts in this post, we increasingly learned it takes more than great customer service to keep customers coming back for more. Today, you’ll explore tactics across the marketing, sales, and customer success departments to convert sporadic buyers into loyal, valuable customers.

What is Customer Lifetime Value?

Customer lifetime value (CLV or CLTV) is the total amount of money a customer is expected to spend across their entire relationship with your business.

Customer value lifetime value formula:

Average order value (AOV) x Purchase frequency (PF) x Average length of customer’s relationship with your business in years

Understanding where your CLTV stands in the industry allows you to identify growth opportunities. 

For example, if your CLTV is higher than the industry’s benchmark, you likely have a competitive advantage that attracts customers. Moving forward, you’ll want to maintain your market share in the changing market through innovation and differentiation.

While it’s unlikely to pinpoint your competitors’ exact CLTV, it is possible to estimate a ballpark figure using competitive intelligence tools like Unkover. Analyze data on pricing, funding, and press mentions to estimate their CLTV and stack up your business against them.

How to Increase Customer Lifetime Value?

Try these tactics across the marketing, sales, and customer success departments to convert one-off buyers to loyal customers.

1. Reduce delinquent and active churn

B2B SaaS businesses often overlook delinquent churn, an involuntary churn caused by payment problems (e.g., expired credit card).  

The reason it’s often ignored, according to Joshua Thomas, a senior account executive at InsuredMine, is because of mindset and prioritization. 

“Growing SaaS businesses tend to focus solely on new acquisition and expansion revenue, with little regard for the leaky bucket,” explains Thomas.

Consider a 5% churning rate.

At first glance, it doesn’t look too bad. 

However, with this figure, Thomas argues, you lose nearly half of your new customers over their first 12 months, forcing you to focus more on new acquisitions. 

“It’s a vicious cycle.”

Fortunately, there is a way to reduce delinquent churn. 

During his time as a customer retention strategist at ProfitWell (now acquired by Paddle), Thomas saw businesses that addressed delinquent churn increase customer lifetime value from 15 to 40%.

So, how do you improve it?

By automating the tactical elements of churn. For example, you can use dunning management tools like Paddle to automatically remind customers to update their expired payment details before the next billing cycle.

But what if you want to prevent losing customers who leave voluntarily? 

Judging by how you can prevent 67% of churn from happening if you resolve the customer’s issue at the first engagement, it shouldn’t be too difficult to catch your at-risk customers before it’s too late—that is, if you’re using a contact scoring tool like Breadcrumbs.

Here’s how it works:

1. Connect your data source(s) with Breadcrumbs 
2. Determine what makes an at-risk customer in the Activity model (tip: refer to your buyer personas in this step)
3. Set the scoring model live

Breadcrumbs will send all scoring information back to your main data source, automatically notifying you of customers who display churning behavior.

From here, you can trigger a win back email sequence or reach out to this customer base personally.

Catch your at-risk customers at the right time. Book your demo with Breadcrumbs to improve churn and increase customer lifetime value today.

2. Reward irresistible add-ons 

If something as simple as a free sticker can leave an impression, imagine what happens when you give customers valuable products they really want. 

Force Fleet Tracking (formerly Force by Mojio) offers customers complimentary extra GPS tracking devices when they add new vehicles to their existing plan. 

“There’s no additional fee tacked onto the extra $X/month whenever they add a vehicle to their fleet,” shares Daivat Dholakia, who previously worked as the director of operations at the B2B SaaS startup.

“Customers can expand the coverage without worrying about fees adding up.”

How do you determine the best add-ons to incentivize customers with repeat purchases?

Dig into existing research and data, paying attention to qualitative descriptions of what motivates your customers (e.g., desire for freedom, success). 

For example, customers with a strong desire for time will likely appreciate a dedicated customer success manager to handle installation and configuration. On the other hand, a desire for freebies would point to customer loyalty programs.

3. Instill belonging with user-generated content

Customers who feel a sense of belonging to your brand end up becoming loyalists in the long term.

One way to build such connections is through customer engagement.

“Incorporate user-generated content (UGC) in your marketing efforts,” recommends Nathan Hughes, a self-described marketing maestro turned community cultivator. “Mention users in your blogs, social media posts, and respond to their comments and DMs.”

There’s a two-fold benefit to Hughes’ approach. 

One, the customers you engage with buy more. 

And two, you attract new buyers along the way. 

The data certainly reflects that.  

Almost three quarters (74%) of consumers prefer to see customers’ photos and videos, instead of professionally shot images, before purchasing.

And it doesn’t always have to be content from customers. 

Buffer incorporates photos from the community. Once it spots a suitable photo out in the virtual wild, it reaches out to the owner for permission before posting. Since implementing UGC in its social media posts, its Instagram followers have increased by almost 400%. 

For best results, reach out to these users directly for the original photo. This way, says Brian Peters, who built Buffer’s UGC campaign from the ground up, you access the HD version of the photo and build a long-term relationship with people on an individual level.

4. Make it as easy as possible

Giving clients the ability to upsell their services with a single touch of the button increased CLTV by 15%, says Gene Caballero, co-founder of GreenPal.

Ease of use increases product value. 

In Greenpal’s case, the landscaping providers expand their offerings without jumping through hoops. 

“They’re already at the [homeowner’s] property,” explains Caballero. “So they can easily quote any additional services they perform on our app.” 

The more users benefit from the product, the longer they stick around, and the more you increase customer lifetime value. 

Survey users to understand what they like (or don’t like) about your product. Tweak the user experience based on customer feedback and trends distilled from your data. 

And one last tip.

Reconnect with them periodically—not on whim. That’s how you get active participation in customer satisfaction surveys and win back more at-risk customers.

5. Offer around-the-clock support to everyone

It takes more than a product for a company to stand out. 

Often, it’s the people.

“Even if your product is superior to competitors, it’s not uncommon for customers to leave if you’re unable to communicate effectively,” explains Paul Sherman, a chief revenue officer (CRO) at Ned’s Home.

“People are accustomed to lightning-fast response times.”

Numbers paint the picture. 

46% of consumers expect companies to respond faster than four hours, while 12% expect it within 15 minutes or less.

Sendlane, a multichannel marketing automation platform, goes further.

Customer support is available 24/7, 365 days every year—even on holidays. On average, customers wait for 30 seconds before speaking to a CS rep. 

And it’s not only paid customers who access one-on-one personalized assistance. Even free trial users get to experience Sendlane’s world-class support. 

The startup is so known for its unparalleled customer support that it has become an integral part of its unique selling proposition (USP).

Invest in a responsive support team that operates in different time zones.

“That way, customers will receive help as soon as they need it,” adds Sherman. “And you’ll stay on top of issues before they pile up.” 

6. Assign a dedicated customer success manager

While there are multiple aspects of what makes exceptional customer service—responsiveness and product expertise come to mind—nothing beats personalized support.

Once again, the data accurately reflects the situation.

Based on McKinsey’s report, 71% of consumers expect companies to deliver personalized interactions, and 76% become frustrated when that doesn’t happen. 

And get this. 

Companies that excel in personalization reduce customer acquisition costs by 50%, raise revenue by 5-15%, and boost the efficiency of marketing spend by 10-30%.

Bambrick wants a slice of the pie.

It assigns a dedicated customer success manager to every client, making sure they’re supported at every step of the way.

“Every customer is different,” says Jason McMahon, a digital strategist at the digital marketing agency. “Some prefer content guides to learn about your product, while others prefer personalized onboarding.” 

According to McMahon’s experience, clients who believe they have a one-to-one relationship with someone in the company are more likely to stay for a long period of time. 

“Customer interactions become more personalized and pleasant because of this technique,” adds McMahon. “And customer retention rates and lifetime value grow.”

7. Ensure sales and customer success are in sync

“Without a customer success team,” muses Chris Gadek, CRO at AdQuick, “Our sales team wouldn’t be able to tend to our customers and provide a superior customer experience.”

What Gadek means is sales and customer success alignment—like an SDR handing over a new client to a CS rep with zero to little friction.

However, many companies still struggle to align these two teams together.

At Proposify, customer success managers weren’t entirely sure why customers bought their product. And the AEs didn’t know what information was required to kick off an account. 

This created a slow and disconnected experience for customers and affected time to value (the longer it takes for new customers to derive value from your product, the quicker they’ll leave for competitors). 

To align sales and customer success, says Connor Cox, VP of revenue at Trolley, start by acquiring the information the CS team needs to run an effective kick-off call (tip: review past successful onboards to spot patterns).

Next, gather your sales and customer success leaders to determine how to incorporate the information in the sales process. This will create a smoother sales-to-success handoff.

Alignment between sales and customer success leads to higher retention.

And since customers have already derived value from your product, the chances of upselling them are significantly higher.    

To boost upsells and referrals, consider using Breadcrumbs to identify customers with upsell potential.

Here’s how it works:

1. Connect your data source(s) with Breadcrumbs
2. Determine what makes a customer with upsell potential in the Activity model (e.g., hits above average purchase frequency rate, hit product usage)
3. Set the expansion scoring model live

Breadcrumbs will send all scoring information back to your main data source, automatically notifying you of customers that fit your upsell criteria.

You know the drill.

From here, either trigger an upsell email marketing campaign with tailored product recommendations or reach out one-on-one with special offers. 

All Hands on Deck: Increase Customer Lifetime Value Across All Departments

It takes more than excellent customer service to increase customer lifetime value.

From instilling a sense of belonging with UGC to syncing the sales and customer success departments, the tactics you implement from this guide maintain and maximize your competitive advantage.

Breadcrumbs is a fully featured contact scoring platform. Identify all qualified leads and high-value customers across the entire customer journey in one single place. 

Book your demo with Breadcrumbs to increase customer lifetime value today.