Maximize Customer Lifetime Value (CLTV)

There are two methods to expand your business. One is to attract new customers. The second is to concentrate on retaining customers already there and improving the value of their lives (CLV).

The data shows it is the latter strategy is an effective method for achieving steady and regular growth of revenue, even though studies show that 44% of businesses invest more time and resources in attracting customers, while just 16% of companies concentrate on reducing churn, dispelling the old wisdom that it’s less expensive to retain and please a customer than to acquire the right one.

Remember that the longer you retain a customer, the more value you can provide them throughout their relationship with your company. This is where the concept of the value of a customer’s lifetime comes into play.

Customer Value

What Is Customer Lifetime Value?

Value of the Customer’s life (sometimes short-hand as CLTV or CLV) is the amount of money a typical customer will earn throughout their time with your company. It considers the factors that influence the frequency of purchases as well as the average value of orders and the average amount of orders. Naturally, CLTV marketing is used to boost every Customer’s lifetime value.

How Do You Calculate Customer Lifetime Value?

There are many ways to determine how SaaS companies determine this metric. One of the simplest methods is simply to calculate the average value of each Customer (considering all of your customers) and then their life span.

CLTV = Average customer lifespan /Average customer value

You could also determine this for one Customer, then average the results for all customers.

The formula to use to calculate the CLTV is:

CLTV = Lifetime* Gross Margin* ARPU

Here, ARPU = Average Revenue Per User & Gross Margin % = (Revenue – Cost)/Revenue

The essential method to increase the size of a company is to concentrate on keeping existing customers and increasing the value of their life (CLTV).

As I said earlier, both of these approaches suggest that the lifetime value of your customer is directly related to the client’s life span. Therefore, let’s look into the simple and unique tips that our experts have provided on how you can increase the value of your Customer’s lifetime.

Some Effective Ways to Increase Your Customer Lifetime Value

1. Better Communications

Better Communications

How can to make them feel loved within any kind of relationship? You are listening to them. In the context of marketing, listening becomes more active in meaning, yet it’s the same concept.

Enhance your listening skills and overall communication by utilizing well-studied customer personas and segmentation of customers. Learn more about your clients via feedback channels, analysis of customers as well as market analysis.

2. Improve the Onboarding Process

On Boarding Process

In terms of customer Success, Onboarding is the one you must take your time with to ensure long-term business expansion. It should be one of the top priorities since bad onboarding is the most common cause of the churn rate, 23 percent, to be precise.

It’s where your Customer truly engages with your service and is where you can have the most positive impact. That being said, creating an effective onboarding strategy is crucial to making new customers come back to you for more and ultimately increase their value for your business.

The procedure can be different according to the business and Customer’s needs and desired results.

3. Set Up a Referral Program

A referral program, also known as”word of mouth” marketing, can be cost-free for your company. It’s the best method to boost the value of your Customer’s lifetime without having to do much.

What’s the procedure?

Referall Programm

Gwen Beren of Illuminous Marketing discusses, “By making your customer a driver of other customers, you exponentially increase the CLTV of that single customer.”

For instance, Customer A, with a CLTV of $500, has 3 other friends who share the value of the first Customer. Customer A now has an estimated value of $1500 or greater. Since if one of the three new friends refers to three others, Customer A has a CLTV of $3,000. The CTV for Customer A by $500 through creating a seamless and profitable system in which Customer A can refer new customers.”

However, this must be done with care.

1. Quality Customer Support via Omnichannel Methods

“You may lose a potentially high lifetime value customer by one negative interaction,” claims Melanie Musson of FreeAdvice.

Ultimately, it does not matter if you have the support you need 24 hours a day. It’s all in the quality of the support that you provide.

Brett Prentiss of Instinct Marketing Brett Prentiss of Instinct Marketing “How you can maintain the same high standard of customer service is quite simple Be authentic. Be on the lookout for them. Respond to their calls at the most convenient time. Find out what is bothering them and provide an answer that will continue to resolve the problem. When you’ve solved the issue, continue to work in the same way.”

2. Provide Targeted, Personalized Campaigns

Personalized Campaigns

56 percent of digital marketers believe with the fact that marketing via email is the best method of digital marketing to keep customers loyal. Yet, many companies aren’t able to provide meaningful information. Instead of providing valuable content, they focus on automated advertisements that don’t offer any value.

Personalized and targeted marketing allows you to target particular customers and allow them to engage with content that is designed for them.

3. Put Them First – Hear Your Customers

If the majority of customers you serve are satisfied or not, you’ll be able to tell how your business is performing. However, to gauge their satisfaction make sure you gather the right information. In this scenario, it is a simple survey that works very well. You could include:

On a scale ranging from 1-10, if the client would recommend your product to anyone else.



The customer lifetime value is an extremely useful metric to keep track of because it reveals customers’ satisfaction and can help forecast your business’s future. After you’ve learned about the different elements and the metrics that affect your value to your customers over time and potential growth and improvement. There are many ways to increase the value of your customer’s lifetime and now is the time to act.