How to Increase the Lifetime Value of Your Customers
Making that initial sale is great but did you know you could be missing out on so much more? Today we’re going to talk about how to increase the lifetime value of your customers. This will lead you to more profit and success with dropshipping. When you have more profit you will be able to reinvest into your store and scale your brand. This will give you a much greater reach and enhance your business health in the long term.
How to Increase the Lifetime Value of Your Customers the Right Way
Most people dropship the wrong way. They acquire the customer for the first sale but then they let them disappear forever. This is definitely not the right way to dropship. First let’s talk about the upsell and cross sell. Have you ever purchased something from a store only to be offered a more expensive product or service immediately after? That’s what you call an upsell. It’s a vital concept to understand if you want to know how to increase the lifetime value of your customers.
A customer is more likely to buy something else immediately after they have made an initial purchase. This is when their immediate gratification senses are heightened and they are ready for another dopamine hit. You should therefore capitalise on this buy offering them something more attractive when they are ready for it. This is a fantastic way to increase the lifetime value of your customers. A sale can be doubled in value with one simple upsell.
A cross sell is when the customer adds a product to cart. When they do this, an offer appears saying “you might also like” or something similar. This is another great way to increase the lifetime value of your customers. Make sure the products you are offering are related to increase your conversion rate.
Remember how I said it was wrong to let your customer disappear forever? It’s important you don’t let this happen. To dropship correctly, we want loyal, returning customers who will buy from us for many years to come. Think about when you go to the barbers/hairdressers. You don’t only go once right. If you’ve found a good establishment then you’ll keep coming back unless something changes. What do you think your lifetime value is to the barber/hairdresser? It’s certainly much higher than the ten dollars you spend on your first visit.
To capitalise on this we must have a way to continually stay in touch with our customers. What is the best way to do this? Build an email list of course! An email list is the best way to keep in touch with your customers and increase the lifetime value of every single one. Make sure you have an opt-in option to your email list at every checkout. You can install popups offering a discount in exchange for their email address. This will incentivize customers to input their email address and could also make you more sales too.
When a customer purchases a product from your store, make sure to stay in touch with them. The best way to do this is to offer them a discount immediately after they purchase. Science says when a restaurant serves you four times, they have made a customer for life. I’m sure it is the same for ecommerce stores as well. We want them to make another purchase as this will fully cement our relationship with them.
You should use your email list correctly. This means you should send out weekly marketing newsletters to your list. You can promote some products and let everyone know of any big sales coming up. It’s also a good idea to tell a story for entertainment purposes. I always talk about branding and this is when it comes in handy. We want our customers to feel a connection with us. This helps increase trust and affection. I hope you enjoyed this article on “how to increase the lifetime value of your customers”. Make sure you go out and apply the tools and tactics we discussed here.