The Rise of Omnichannel Loyalty Programs (With Use Cases)

8 Effective Customer Loyalty Programs for Consumer Good Companies

10 Top SMS Marketing Campaigns by Major Brands 

5 Powerful Strategies to Prevent Customer Churn and Increase Customer Retention

The Importance of Building Relationships with Customers

Customer Brand Loyalty: What Apple has, that You Don't!

Customer relations are essential to the success of every business. A business's customer base is the primary source of revenue, and customer satisfaction is critical for repeat business. 

Developing a customer base requires spending money on marketing to promote products or services. Identifying and building good customer relations is essential because it helps you __increase your revenue on the long-term, reduce costs and even achieve higher margins__.

Today's technology makes building customer relationships more straightforward than ever. There are numerous ways to develop strong customer relationships in this fast-paced world. 

Would you like to improve your relationship with customers? Keep reading this article to find out how to successfully do that.

## Different types of customer relations
First, let’s look at the definition of customer relations and the different types of customer relations.

## What does the term "customer relations" mean?
When we talk about customer relationships we refer to the __strategies used to engage with your customers and improve their experience with your brand__. That includes providing answers to their queries and concerns and taking proactive action to create long-term customer success. 

Building positive, long-term and trust-based relationships with customers is extremely beneficial for your business and therefore deserve attention and financial support.

__Building customer relations is a company-wide process__ that involves every member of your organization regardless of their positions and roles. It’s the sum of all customer interactions and experiences to create a bond between the brand and its buyers.

A good customer relations strategy helps to build trust and brand reputation with your customers. You can create a broad spectrum of customer relations for your business.

### 1. Transactional relations
Transactional relations primarily focus on __exchanging money for your products__. The goal of every interaction with the customer is to complete a transaction.

Brands that focus on transactional customer relations are not going to build customer trust or brand loyalty. Their aim is short-term profitability. They only attract customers looking for a specific product they feel they need at the moment, but they are not interested in building a relationship with a brand.

### 2. Personal assistance
During and after the purchase, customers might need support from you. In this circumstance, the customer engage with a brand representative to ask for __support during the sale or after the purchase is completed__. These interactions can take place either physically or through digital channels.

![in text - chat real-time](//images.ctfassets.net/scrf7o05zai3/7rzSn1hpnLTxh8QBhQm1eI/07f89212bf49e86aecbd13248d59d9cb/CleanShot_2022-06-28_at_16.53.15.gif)

### 3. Dedicated personal assistance
Some individual clients can have a specific company representative dedicated to them. It is the most profound type of customer relations and is common in financial institutions for high-net-worth clients. Marketing agencies also have account managers to maintain personal relationships with important customers.

### 4. Self-service
Brands can also build customer relations through self-service support. In this case, __the company provides customers with all the necessary tools to help themselves__. These are unilateral communications mostly seen in eCommerce as online stores provide a wide range of solutions, such as chatbots, to improve the customer’s shopping experience.

### 5. Automated services
That’s a more sophisticated mix of self-service with automated processes, also standard in the eCommerce industry. Businesses use automation such as __Customer Relationship Management__ (CRM) systems to schedule automatic responses to specific queries and considerably reduce employee workload. The software solutions collect individual customers' characteristics and offer information related to the transactions and orders history.

### 6. Community building
Companies are increasingly looking to build communities around their brands. Community-based relationships are multi-faceted and involve engaging customers to create a lasting impression at all sales funnel stages. 

__The community acts as a brand advocate and tells your story__. Customers participate and can learn from the experiences of each other. It takes time to establish and nurture community-based customer relations. 

### 7. Co-creation process
Nowadays, personalization of the customer experience is vital. In the co-creation process, company and customers collaborate to create value together. __Customers are given a say in product design, delivery, and other aspects__ that touch on them. It is more about creating a two-way dialogue to ensure you are providing value. Like community relations, the goal is to foster brand loyalty and customer retention.

You can have different relations with your customers depending on the type of business, the business model, and your business lifecycle. 

Businesses can integrate multiple types of customer relations into a unique system, such as Layerise, to help acquire, retain, and grow their customer base and create a value chain for the business and its customers.

## The importance of building valuable customer relations
Putting amazing products into the market is important. But then you need customers actually buying the product to be successful. Strong customer relations determine whether your business makes or breaks. 

Consumers aren’t just looking for great products. [82%](https://cloud.google.com/blog/topics/consumer-packaged-goods/data-shows-shoppers-prioritizing-sustainability-and-values) of consumers say they wouldn’t purchase from a brand if they feel that their values don’t match, not even if it was their favorite product. They are interested in what you’re selling, how you doing it, and what happens after the sale.

__An effective customer relations strategy is the backbone of sustainable business growth__. Here are some benefits of building valuable customer relations.

### 1. Increased customer satisfaction
It can often be hard to tell whether your customers are happy. But if you notice your churn rate increases, it could be that the satisfaction level is decreasing. [96%](https://www.forbes.com/sites/shephyken/2020/07/12/ninety-six-percent-of-customers-will-leave-you-for-bad-customer-service/?sh=e1806e230f82) of customers will leave you for bad customer service. And most of them won’t even raise a complaint before leaving. 

So, instead of waiting for your churn rates to increase, why not improve your customer relations? __Strong customer relations safeguard you against your customers disappearing on you__ without warning. If they have to churn, they’ll at least share the feedback with you (the importance of customer feedback in the next point).

### 2. Invaluable customer feedback
__Positive customer relations also help create an open communication channel__ with your customers and get valuable insights into their problems. It would be best if you had this feedback to build better customer interactions, improve brand trust, and increase your customer's lifetime value. 

Positive customer relations make it easier to get customer feedback. It allows you to turn customers into loyal customers and even brand advocates.

### 3. Increased customer retention
According to a Microsoft State Of Global Customer Service Report, [61%](https://info.microsoft.com/rs/157-GQE-382/images/2018StateofGlobalCustomerServiceReport.pdf) of customers will ditch a brand if they have a negative experience. 

The market is crowded with similar products to yours and equally competitive pricing. What sets you apart from your competitors is the kind of experience you offer. 

Today, __customer experience is the number one brand differentiator__. Positive customer relations will increase customer retention rates and, in turn, reduce customer acquisition costs. [Studies](https://www.businessnewsdaily.com/16027-customer-retention-rate.html) also show that a 5% increase in customer retention can boost your profits by at least 25%.

### 4. Increased customer loyalty
When you have a good relationship with your customers, losing them to your competitors becomes difficult. Building customer loyalty takes time and resources, but the return on investment is massive.  Loyal customers are not only good for repeat purchases, but they also make the most prominent brand ambassadors for your business. [88%](https://www.investopedia.com/terms/w/word-of-mouth-marketing.asp) of consumers trust product recommendations from their friends and family. 

Now, do you see why you need loyal customers in your corner? Increased customer loyalty can be instrumental in generating consistent revenue over time.

## Customer service vs. customer relations: key differences you should know
Customer relations and customer service are often used interchangeably. They may have similar concepts, but there are distinct differences between them. They don’t mean the same thing.

First, __customer service is an inbound function__. It’s what you provide to customers at the first point of interaction to ensure customer success. Most customer service functions are delivered in response to customer action. 

On the other hand, __customer relations is both an inbound and outbound function__. It includes proactive measures to improve present and future customer experiences. Instead of waiting for the customer to engage you, you take the initiative.

*Customer service* also focuses on __immediate customer needs__. *Customer relations* focuses on __long-term customer experience__ solutions.

Third, the purpose of *customer service* is to __resolve customer inquiries and complaints__, while the goal of *customer relations* is *building a relationship with the customers*. 

__The reality is that the functions of customer service and customer relations often overlap__. You can improve your customer service by developing better complaint resolution systems (a function of customer relations). And you can improve customer relations by rethinking every point of the customer’s interactions with your brand (a function of customer service). 

In a nutshell, customer relations and customer service share overlapping principles; the only fundamental difference between them is that the latter is reactive. 

## The steps to building strong customer relations
Customer relations are one of the main components of any effective business growth strategy. It is the entry point for building a lasting bond between your brand and the consumers, giving them a reason to choose you over your competitors.
Here are a few tips for building strong customer relations:

### 1. Create a customer-first culture
You should adopt a customer-centric culture to create positive customer relations. It would help if you focused on immediate customer success and long-term customer experience solutions. Ensure the customer’s needs are taken care of at every sales funnel stage. 

Other ways you can create a customer-first culture include:
- Improving __first-call resolution rates__;
- __Showing appreciation__ to customers through incentives such as giveaways and loyalty programs;
- Creating an __online community__ for your customers to interact with each other and the brand;
- Providing __education programs__ such as webinars and how-to guides that help your customers grow better;
- Measuring and __improving customer satisfaction__ through, for example, customer satisfaction surveys.

### 2. Be accessible
Your team should always be ready to help customers with their queries and concerns. Customers appreciate the availability, and they’ll patronize your business if they know help is easily accessible. Technology such as self-help desks (more in the next point) can help to improve availability and accessibility. But don’t forget the memorable experience that human interactions can provide, especially if you are a brick-and-mortar business.

### 3. Create opportunities for self-service
Self-service solutions such as FAQ and user guides can help to provide customers with simple business solutions and guide them through your website. They enable you to help your customers even when a team member isn’t present. That helps to take care of self-sufficient customers and improve their satisfaction. 

That’s not to say that you should replace your customer service teams with self-service solutions. Again, human interaction is essential.

### 4. Be personal
This is perhaps the most important tip. Giving your brand a human face makes it easier for customers to interact with you and buy your products, even for self-service options. 

It would help if you had an actual member of your team sign off emails, chats, and other online interactions with their name. While chatbots used to be an exception for this, more and more companies are utilizing an internal alias for automated customer assistance.

### 5. Empower your employees
Remember the famous quote by Richard Branson that "*if you take care of your employees, they will take care of the customers*"? 

[Studies](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7120033/) indicate that happy employees are more productive. If you want to improve your customer relations, your first focus should be your employees. Empower them and create a more satisfying work environment for them. You should also invest in constant employee training so their skills are up to date with industry standards.

Your employees are, after all, your first customers. Take care of them.

### 6. Leverage digital solutions to improve efficiency
Lastly, you should leverage technology to improve the efficiency of your customer service. A CRM system can help to expand your customer service bandwidth and create positive experiences for consumers who interact with your business. It also gives you actionable insights on how to improve your customer relations.

## How Layerise can help you create valuable customer relations
You don’t stumble your way to great and valuable customer relations. You have to build it. It begins with considering your customers’ needs and exceeding their expectations. 

As eCommerce grows, technology is becoming integral to building positive customer relations. Solutions such as __Layerise__ are reinventing customer relations and enabling businesses to use their resources more effectively to improve customer relations. We enable you to consider every customer touchpoint for a strong, trusting, and lasting connection with your customers.

If you want to learn more about how to build long-lasting trust relationships with customers, [book a free demo now](https://www.layerise.com/)!

How to Connect with Your Existing Customers

According to researchers, it has been found that [we are psychologically wired to think that new must always be better](https://time.com/money/4079641/why-consumers-prefer-new-stuff-iphone/). It's natural to constantly search for new strategies to attract the next 'new' consumer. But ignoring your loyal customers to attract new ones, can be extremely dangerous for your business. 

__Do you spend more money on improving your relationships with current clients or on growing your customer base by targeting new ones?__ The question is misleading since both are essential for growth and sustainability in their own way. Experts have been discussing this topic for a long time, but the answer is always evolving as regulations and customer preferences have changed. 

Statistics by Invesp show that only [18%](http://www.sailthru.com/marketing-blog/written-customer-acquisition-vs-retention-infographic/) of businesses claim to put more emphasis on retention, while more than [44%](http://www.sailthru.com/marketing-blog/written-customer-acquisition-vs-retention-infographic/) focus on customer acquisition. Retention-boosting initiatives are frequently postponed or completely ignored. However, in most business models, retention gives a far more significant return on investment from advertising spending and is much more financially sound.

Let's dive into the reasons for customer retention over acquisition and discuss customer retention strategies. 

## Customer Retention vs Customer Acquisition  
__Customer acquisition is the process of acquiring new clients__. It entails drawing potential customers to your firm and convincing them to purchase your goods or services.

On the other hand, __customer retention refers to the technique and capacity of a business to maintain its clients over time__. It involves keeping customers active, happy, and loyal advocates of your product or services.

Acquisition and retention work similarly to a bird's wings: It is difficult to fly without either one or the other. Similarly, to succeed in the business industry, you must first attract customers with acquisition strategies and then implement an action plan to retain them over time. 

### Customer acquisition expands your clientele.

It should go without saying that a business has no reason to exist if there are no clients to serve. You need to get at least a few clients to start your business. To increase your customer base and find more business prospects, you need to focus on customer acquisition strategies.

### Customer lifetime value increases with retention

The lifetime value of a customer (CLV) is the projected value over the course of their engagement with your business. Repeat clients are nearly always more beneficial to your business than one-time customers.

However, there are several reasons for prioritizing customer retention over acquisition. For instance, customer acquisition is more expensive. Acquiring a new customer can cost up to five times more than retaining an existing one. In comparison, increasing customer retention efforts by just [5%](https://smallbiztrends.com/2014/09/increase-in-customer-retention-increases-profits.html) can increase profits from [25% to 95%](https://smallbiztrends.com/2014/09/increase-in-customer-retention-increases-profits.html). 

## 5 reasons why you should focus more on customer retention than customer acquisition 
Let’s look at why you should focus more on customer retention strategies than customer acquisition. 

### 1. It fosters personal connections with customers. 

Prioritizing customer retention strategies is beneficial for your business because it focuses on __creating valuable connections with customers__. By designing a superior customer journey you can leverage touchpoints to gather data about your customers and, at the same time, to show how much value you can offer them through your products and services. 

Collecting data about your customers at the different touchpoints is key to __personalizing their experience__ with your brand, thus enhancing customer satisfaction and thereby loyalty. 

Additionally, regular clients are aware of the aspects of your company that need improvement. By listening to their __feedback and opinions__, you'll be able to spot fresh opportunities and boost retention and sales. Such clients will eventually be more willing to pay higher prices.

### 2. It saves the marketing budget. 

It is a simple fact. Retaining existing customers is far cheaper than acquiring new ones. Consider the amount of money you would need to invest in marketing to bring new clients to your website. Even if your marketing efforts are successful, there is no guarantee that the leads you produce will become paying clients.

__Customer acquisition costs are rising__, the prices for ads are constantly changing based on the number of companies that are competing in your field. Existing customers have a higher conversion rate than potential customers: Since they know what your company offers, they are [nine times](https://blog.smile.io/repeat-customers-profitable/#:~:text=They%20found%20that%20a%20customer,than%20a%20first%20time%20shopper.%E2%80%9D&text=As%20you%20can%20see%2C%20that's,few%20extra%20purchases%20per%20customer!) more likely to purchase from you.

### 3. It increases revenue. 

Most companies' revenue depends on [20%](https://www.smartkarrot.com/resources/blog/pareto-principle-80-20-rule-customer-success/#:~:text=Customer%20Success%20Pareto%20Principle,-A%20well%2Dknown&text=The%20potency%20of%2080%2F20,responsible%20for%2080%20percent%20revenues.) of their current clients for [80%](https://www.smartkarrot.com/resources/blog/pareto-principle-80-20-rule-customer-success/#:~:text=Customer%20Success%20Pareto%20Principle,-A%20well%2Dknown&text=The%20potency%20of%2080%2F20,responsible%20for%2080%20percent%20revenues.) of their future sales. That is because __repeat clients don't need to be pursued aggressively to buy__ from you if they were satisfied with the experience the first time. In reality, the likelihood of convincing an existing customer to make another purchase from you is [60–70%](https://www.smallbizgenius.net/by-the-numbers/customer-loyalty-statistics/#gref), compared to merely [5-20%](https://www.smallbizgenius.net/by-the-numbers/customer-loyalty-statistics/#gref) for a new lead.

Long-term customers require less hand-holding, are less expensive to serve, and make pricing monitoring activities easier. 

### 4. It improves the onboarding process. 

The onboarding process is crucial to retain customers in the long run. Offering a good first experience is key to increase customer satisfaction and boost repeat purchase. __Your retention strategies should focus on offering a superior onboarding process__. 

Make it easier for your customer to register your product and start using it. Offer informative content to help them install the product and learn how to get the most out of it. Educate them on how to leverage all the different functionalities and adapt the usage based on their needs and wishes. 

Also, during the onboarding process remember to collect relevant data about your customers. This will help your personalize their experiences, thus increasing customer satisfaction and retention in the long run. 

### 5. It converts customers into brand ambassadors. 

Today’s consumers are vocal about their experiences, which also influences other customers' buying decisions. When customers are satisfied with the experience you are offering, they will talk about your brand with their friends and family. 

Therefore, you will eventually discover that __client retention = customer acquisition__. After all, word-of-mouth advertising is the most successful type of advertising, and it's also totally free.

By rewarding them for referring their relatives and friends, you can also encourage acquisition from your current customers. As we discussed, retention has the potential to boost your profit by [25% to 90%](https://blog.hubspot.com/service/customer-retention) for this very reason.

![in article-review](//images.ctfassets.net/scrf7o05zai3/XMoEkBZbCa0ttlU3QVv84/24911aa21ccfc78ef3599670e1762263/in-article-gif.gif)

## How to increase customer retention
Now that we have discussed the reasons for prioritizing customer retention over customer acquisition let’s look at effective customer retention strategies that will work for your business.

__Businesses engage in customer retention strategies and tactics to prevent customers from leaving__. The purpose of customer retention strategies is to assist businesses in keeping as many clients as they can, frequently through brand and customer loyalty programs. It's crucial to remember that customer retention starts with the first interaction and lasts until the end of the relationship with the customer.

### Define expectations

Customers can easily get irritated if expectations are not properly stated and communicated. The experience and expectations of customers vary a lot. Some consumers prefer an acceptable experience for cheap prices, while others might expect high quality services and are willing to pay a premium price for that. Based on your customers expectations, they will interact with you differently and your retention strategies could be more or less effective. 

To ensure that expectations are satisfied, it's crucial to comprehend customers’ preferences and expectations and therefore __communicate properly your value proposition__, including your products’ functionalities and related services. By enhancing transparency, your target customers will be more satisfied, hence you will be able to retain them for longer. 

### Build valuable customer relationships

Customers typically get in touch with customer success agents the most. Customers and agents communicate through several conversations over the phone, emails, and chat messages. Your representatives should be aware of past complaints and complications so that the customer doesn't need to remind them every time they ask for help.

Changes in customer success personnel break these connections, which harms your business's client retention rate. To mitigate this issue, you should __educate your agents on how to properly handle customers’ requests proactively__. Provide them with best practices, tools and all they need to be good representatives for your brand. 

Also, your business needs to ensure that proper client data is stored, so that even if an employee leaves, a customer doesn't experience any downtime. Layerise can help you capture and store all essential customer-related data and it displays them while your agents are chatting with the users.

### Use the principle of reciprocity

The principle of reciprocity is a social construct that fosters loyalty. When someone does something good for a person, they feel obligated and naturally want to return the favor.

__There are two types of reciprocity: trumpeted and surprise__. Both of these can be utilized to improve customer loyalty in customer care.

__Surprise reciprocity__ refers to a surprise gift or gesture. This can happen, for instance, when your business sends over tickets for a game or gives an exclusive preview.

__Trumpeted reciprocity__ happens when someone gives or does something helpful, going above and beyond expectations. These types of responses make it clear to the client that what you are doing is something that goes beyond the regular conditions for their satisfaction. This might be as easy as giving the customer a special discount in return to repeat purchases.

### Provide a consistent customer experience 

Customer trust can be increased through consistency. They know what to expect and can count on your team to complete the task and provide the required outcomes, at any time. Customers don't like surprises that negatively impact their routine, especially when they are experiencing issues with your product.

Create kickoff meetings and a __smooth user flow for onboarding__ new customers to ensure a positive experience from the very beginning. After the onboarding process, focus on creating __high quality interactions__ between customers and your representatives. Design standard processes for your team to be more effective and helpful when dealing with customers’ issues.

### Introduce a customer loyalty program

Giving customers even more value, such as through a customer loyalty or __rewards program__, is one of the most effective methods to encourage loyalty and retention. These programs are widely used by airlines, hotels, eCommerce, restaurants, and other companies.

Simple customer retention tactics that can greatly impact promoting loyalty include user-generated content, loyalty bonuses, gamification, and prizes for customer referrals.

## How Layerise can help you increase customer retention  

Making efforts to retain customers is a marathon, not a sprint. You need to thoroughly plan retention strategies to offer an experience that goes beyond all expectations and make your customers satisfied. 

__Layerise helps brands foster customer loyalty and revenue in the long run by leveraging the power of data__. 

With Layerise collecting data about your customers has never been easier. With our solution, you can get an __in-depth view of your customers__ based on geographical, demographical, preference, and behavioral variables.

Thanks to data collection, Layerise helps you understand why your consumer is unhappy and what can be done to reduce such experiences. Insight like that helps you improve customer experience across the board.

Loyal customers can do so much more for your brand! Layerise is here to support your brand throughout the entire journey. Give it a try yourself by checking out our website or [booking a demo](https://www.layerise.com/) today.

5 Reasons Why You Should Prioritize Customer Retention

If you are a brand owner or manager, you must already be familiar with the fact that __retaining an existing customer is easier than acquiring a new one__. In fact, the probability of selling to an existing customer is between [60% to 70%](https://www.invespcro.com/blog/customer-acquisition-retention/), whereas the probability of selling to a new prospect is only [5% to 20%](https://www.invespcro.com/blog/customer-acquisition-retention/). 

Although customers are gained and lost over a brand’s lifetime, a truly excellent product/service accompanied by valuable customer service can keep customers satisfied and hungry for more. This appetite for “more” keeps customers returning and adds value to the brand's relationship with consumers. 

The last thing any business wants for its customers is to churn while they continue to scramble for new revenue streams. The best way to mitigate this crisis is by monitoring __customer lifetime value__ (CLV). 

When brands measure customer lifetime value, they can retain highly valuable customers and calculate how much they are worth over the customer's lifetime. This ultimate guide teaches how to increase CLV and tips to measure customer lifetime value. 

## What is customer lifetime value? 

Increasing the value of your existing customers is an excellent strategy to foster growth since retaining existing customers is less expensive than attracting new ones. 

*Customer lifetime value (CLV, or CLTV) is a metric that shows how much money a brand can expect to make from a single customer account throughout the customer relationship*. A customer's lifetime value increases the longer they remain a loyal customer of the business.

When measuring a customer's lifetime value, you must also consider customer acquisition costs (CAC), marketing expenditures, operating costs, and the cost to produce the goods and services the business sells. 

Many businesses choose a short-sighted strategy and focus on acquisition, ignoring this essential measure. While attracting new clients is crucial for business expansion, companies must also __maximize the lifetime value of their current clientele to maintain a sustainable business model__. 

Customer support and sales teams directly influence the customer lifetime journey of an end user. Therefore, they play a crucial role in making informed decisions, solving problems, and offering recommendations that increase customer loyalty and reduce churn rates. 

Profits can rise anywhere from [25% to 95%](http://www.bain.com/Images/BB_Prescription_cutting_costs.pdf) with just a 5% increase in client retention rates. In light of this, brands must design a customer retention strategy and monitor its success by measuring the customer's lifetime value.

## Why is it important to measure the customer's lifetime value?

Customer lifetime value (CLV) can be used to make essential business decisions. For instance, __you can use customer lifetime value to determine which customer categories are most beneficial to the business__ and then target them appropriately. 

When you have a multi-year engagement with a consumer, such as a paid TV subscription or mobile phone contract, CLV is a great indicator of future revenue stream. It is also helpful in identifying the earliest signs of attrition when spending starts to decline after the first year due to declining subscription renewals.

Here are a few more reasons why it is necessary to measure customer lifetime value:

### 1. It helps you improve your business strategy
Once brands evaluate the customer lifetime value they can break it down into different factors, i.e. different sources of revenue, and start designing their business strategy to leverage the main sources of revenue while reducing costs. In short, it helps you improve your business strategy. 

### 2. It helps you target the right group of customers. 
Knowing a customer's lifetime value allows you to estimate how much they will spend with you over time, whether it be $50, $500, or $5,000. With such information, you can create a customer acquisition plan focusing on clients who will spend the most money with your company.

### 3. It allows you to make better decisions concerning customer acquisition costs 
Knowing what you can expect to make from a typical customer allows brands to adjust spending to boost or decrease profitability and maintain the right customers.

### 4. It leads to improved forecasting
CLV predictions support a brand’s ability to plan for inventory, personnel, manufacturing capacity, and other costs. Without a prediction, you run the risk of unintentionally overspending, wasting money or underspending, and struggling to meet your customers’ demands.

### 5. It drives repeat sales
Some types of businesses have a devoted clientele that keeps coming back. The average number of visits per year or over the client's lifetime can be tracked using CLV, and brands can use that information to plan tactics to boost recurring business.

Preventing client attrition and enhancing customer retention are two of the most significant aspects of managing CLV. You can find out your best customers and what's working well for them by tracking these facts and accurately segmenting your audience.

### 6. It boosts the profitability of the business
In general, a higher CLV should result in greater profits. Brands should see the benefit of their bottom line as a result of keeping consumers for longer and creating a business that encourages them to spend more money consistently.

As we discussed, measuring CLV can assist a brand in striking a balance between its short- and long-term marketing and sales objectives and show that you have a better grasp of the financial return on your efforts. Additionally, CLV teaches marketers to spend less time gaining clients creating low value, which promotes better decision-making. 

__The most obvious benefit of customer lifetime value is the efficient management of your customer relationships__, which boosts profitability.

## How to measure the lifetime value of your customers 

Calculating CLV can be challenging if the brand's customer relationship measures are not in place. However, an enterprise resource planning (ERP) or customer relationship management (CRM) system can quickly make this information accessible on an automated dashboard that monitors KPIs. 

__CLV can be determined at three different levels__:
- __The company level__ (i.e., the average CLV across all your customers).
- __The customer segment level__ (i.e., the CLV of various subgroups within your customer base).
- __The individual level__ (the CLV of each customer you deal with).

This guide will discuss tips for measuring customer lifetime value for the entire organization. There are a few crucial pieces of information you will need on hand before diving right into the CLV formula. 

__Average purchase value__ is the sum of all customer purchases made over a specific period (typically, a year is the simplest), divided by the total number of purchases made during that time.
__Average purchase frequency__ is calculated by dividing the number of transactions made during the same period by the total number of consumers who transacted during that time.
__Customer value__ is calculated by multiplying the average purchase frequency by the average purchase value.
__Average customer lifespan__ is the typical number of years a customer stays a customer of yours.

Calculating CLV is pretty easy now that you have all the necessary information. The formula for calculating the customer lifetime value is:

![inarticle-CLV](//images.ctfassets.net/scrf7o05zai3/6iWZbGP8iP9YphcYsyS2ZN/33198a73e8742172f7786488524dc131/inarticle__3_.jpg)

Therefore, calculating the average purchase value and multiplying it by the average number of purchases will give you the CLV. The average customer lifespan can then be multiplied by customer value to get the average customer lifetime value.

There are two ways to measure the lifetime value of your companies that companies can use to get accurate results. However, the two models can result in different outcomes. It depends on whether the brand is looking at pre-existing data or trying to forecast the future behavior of customers. Let’s discuss the two models. 

### Historical Customer Lifetime Value 
Without considering whether or not a current customer would stay with the business, the historical model uses pre-existing data to estimate a customer's value. The average order value is employed to estimate the value of your customers. If most of your clients only contact your business over a limited time period, you will find this strategy extremely helpful.

However, this model has several limitations because client journeys can differ a lot. Customers who were once active and valued by the historical model can become inactive, which would give you misleading results. 

### Predictive Customer Lifetime Value
The predictive CLV model uses machine learning or regression to anticipate the purchasing patterns of both current and potential clients.

You may more accurately identify your most important customers, the product or service that generates the most revenue, and ways to increase customer retention by using the predictive model for customer lifetime value.

Let’s take an example that will help you understand the customer lifetime value formula. 

A coffee shop is an ideal example for understanding CLV because it is simple to grasp even if you don't have much experience in the business. Let's assume that a regional chain of three coffee shops makes $5 in sales on average. The typical client is a local employee who comes in twice a week, 50 weeks a year, over five years on average. 

Thus, the CLV would be $5 (average sale) x 100 (annual visits) x 5 (years)= $2500

## How to increase the lifetime value of your customers 

Now that we have discussed the different ways to measure your customers' lifetime value let’s see how we can increase CLV. 

### Redesign your onboarding process. 
The process of introducing your customers to the brand’s product they purchased, including what you do, why it matters, and why they should stick around, is known as customer onboarding. In the first few days following a customer's initial purchase, they learn about your business and what you have to offer them.

Utilize the clients' information to offer carefully selected product recommendations or discounts. Then, follow up with email contacts to ensure that the products they have already purchased live up to their expectations. The reason why improved onboarding procedures are effective is that they create a foundation for ongoing client connections.

### Introduce a referral program. 
Referral programs represent an effective approach to raising the lifetime value of each customer. Research shows that referred customers have an [18%](https://faculty.wharton.upenn.edu/wp-content/uploads/2013/05/Schmitt_Skiera_VandenBulte_2013_Referrral_Programs_2.pdf) lower turnover rate and a 16% greater lifetime value. Additionally, [55%](https://www.searchenginewatch.com/2020/11/20/how-social-media-influence-71-consumer-buying-decisions/) of people discuss their recent purchases on social media, and 81% of customers believe recommendations from people they know.

__By providing a referral program, brands increase their CLV__ and access a pool of potential clients who may later become devoted ones. 

### Improve your customer service strategy. 
[90%](https://blog.hubspot.com/service/customer-service-stats?_ga=2.268941937.1490642023.1620076877-589997350.1620076877) of Americans claim that customer service is one criterion they consider when deciding which brands to do business with. Therefore, you should pay attention to your customer service and search for ways to improve it if you want to increase your client's lifetime value.

__You can enhance your customer service by providing tailored services, omnichannel customer support, and a suitable return or refund policy to your current clients__.

The better your customer service is, the more customers will feel appreciated by your brand for reasons other than their purchases. Customers will understand that quality and satisfaction, not overall sales volume, are you offer proactive customer care and you have strong return and refund procedures. 

### Focus on building long-lasting relationships.
The foundation of lasting customer relationships is trust. Customers will return if they think your business delivers the best deals on the products and services they need. But this is only the start. Customers expect more than just a business-based relationship. 

Now that social media is an essential element of branding and marketing activities; customers want to develop a personal connection that makes them feel like more than just a path to improved business ROI.

Therefore, __it's essential to interact with clients on your social media accounts in ways other than merely posting generic advertisements__. For instance, your teams may initiate a dialogue about a topic that appeals to your target market, or you could use social media analytics to learn more about your clients and then post content that suits their preferences.

You need to stand out from the crowd for this to be effective. Fast and simple eCommerce is now standard; if you can establish a real relationship with your clients, you can keep them coming back and raise your overall CLV.

### Proactively reach out to your customers. 
Customers won't wait for your company to engage with them or provide information. According to recent survey results, [88%](https://www.helpscout.com/helpu/email-customer-service-whats-an-acceptable-reply-time/#:~:text=They%20point%20out%20that%2C%20%22While,study%20at%20Toister%20Performance%20Solutions.) of customers want an email response in an hour or less. __Businesses can implement procedures to speed up response times and facilitate simple connections__, even though it isn't always practical to do so.

A prime example is active social media. Brands can speed up the connecting process and make consumers feel heard by giving a customer success team the resources and technology to track and address customer comments or issues via social media.

__Relationships that demand a constant connection are now what drives CLV__. One-hour email response times might be unachievable, but the more connected your customers feel to your company, the more likely they will return and spend more money.

### Collect actionable feedback. 
Listening is sometimes preferable to speaking. Customers frequently offer helpful suggestions on how you may adjust your operations to meet their demands better, and by implementing those suggestions, you can raise CLV.

For instance, you could __design a poll asking your consumer base what they think about new product or service ideas__. Don't restrict their options; instead, leave flexibility for them to offer new suggestions that might improve the situation. While not all consumers will participate, those who do frequently offer wise counsel may become some of your most devoted patrons.

This works because it demonstrates that you are ready to listen. Too many businesses believe they know what consumers want better than the consumers themselves, reducing overall CLV. Even if customers' advice isn't precisely what you want to hear, you may encourage long-term loyalty and increase CLV by taking the time to listen and answer.

### Deliver targeted and personalized service. 
According to [56%](https://blog.hubspot.com/marketing/email-marketing-stats) of digital marketers, email marketing is the best digital marketing strategy for retaining customers, but many companies fail to produce insightful content. They restrict themselves to automated campaigns without bringing any genuine value instead of offering valuable material.

Sending targeted and customized campaigns allow brands to concentrate on particular sections of clients and encourage their engagement with information specially made for them. 

With Layerise you can create personalized and automated marketing campaigns for specific groups of your customers. We'll talk more about this later!

### Create content to keep your customers engaged. 
Content marketing will undoubtedly make your customers feel more connected to and involved with your brand if you do it well. You have many __more opportunities to raise CLV__ and lower the cost of acquiring consumers __when you publish content that focuses on the typical problems your customers face and educates leads to guide them into the sales funnel__.

Customers who become emotionally attached to your brand will not only remain loyal to you for a more extended period but will also actively promote your brand on social media or through word-of-mouth. Once they are your biggest admirers, there is a good probability that they will buy from you more frequently as well. To achieve this, publish helpful, engaging, and advocating content. 

## How Layerise can help you increase the lifetime value
Brands can dramatically boost their customer lifetime value by using Layerise's solution. You can __personalize the customer experience and maximize your marketing initiatives__. You can also get in touch with your customers directly by email or text message to keep them satisfied and persuade them to keep buying from you.

Layerise also provides the __fastest onboarding of new data__ for your clients. It helps you collect crucial customer data throughout the registration process. Based on the information that clients provide, Layerise automatically customizes their experience.

Additionally, __Layerise helps you in educating customers on how to use your products__. You can create product-specific Assistants with Layerise that are safe for your brand and that your customers can utilize to locate issues, assembly guidelines, or product onboarding information. Creating clear, creative, and helpful tutorials has never been easier.

To learn how Layerise can help your business, [book a free demo ](https://www.layerise.com/)now!

How to Measure Customer Lifetime Value 

Have you ever received one of those “15% off on your next order” coupons with your online shopping package? Even if you didn’t buy from the brand ever again, we’re sure that the idea of getting a discount on your next purchase made you at least consider it.

That’s a common practice to encourage repeat business. __Brands include discount codes or special perks that can be redeemed on future purchases to retain customers in the long-run__. In this blog, we will look into why companies are built on customer retention and how you can maximize the chances of your customer returning for more.

## What is Repeat Business?
Seeing new customers signing in or giving your product a try is an incredible adrenaline rush for sure. But what is this new customer acquisition costing you? Will they help you reach your desired market position? Do consider the fact that it costs roughly [five times more to get a new customer](https://www.yotpo.com/blog/customer-loyalty-survey-data/) than it is to retain your repeat buyers.

__The end goal in any business is to make a profit through selling products or services__. There are two ways you can go about this:

- selling to a client base that has previously purchased from you,
- getting new clients to give your brand a try.

Both aspects are important for the growth of businesses. Most brands try to strike a balance between these two ways of making sales. But __successful businesses focus more on retaining their existing patrons__ and numbers support that: [80% of your revenue is generated by just 20% of your buyers](https://www.gartner.com/en/documents/3471568). 

This 20% is composed of people who buy from the brand regularly, and can therefore be defined as repeat customers. Successful brands focus on them because they understand the transactional value of meeting the needs of their current consumers.

## Why is customer retention pivotal for business?
What’s the most valuable asset for any business? Their unique product? Great customer service? They play a significant role for sure, but what truly makes any brand stand out is its consumers. __Repeat business is the main differentiating factor between a business that thrives and one that fails__.

Here are some statistics that help explain why customer retention is mission-critical for any company:

- In the long-run, loyal buyers are expected to be [worth ten times more](https://martech.zone/customer-retention-guide-statistics/) than they spend on their first purchase.
- 82% of companies find the [acquisition process of new customers to be pricier](https://econsultancy.com/15-fascinating-insights-from-econsultancy-s-2014-reports/) than retaining old ones
- Trust in a brand is what keeps [83% of your consumers loyal to your company](https://hemingwayapp.com/v).
- The annual cost of customers switching to a new brand is [estimated to be around $1.6 trillion](https://www.accenture.com/us-en/about/strategy-index).

## Top 3 reasons why repeat customers are worth the effort
Do you still feel that not acquiring new customers regularly spells doom for your brand? Focus instead on bettering the experience for your loyal buyers. Here are three ways repeat business helps your brand prosper and improve your brand image.

### 1. It helps you save on your marketing strategy
Attracting new clients means you must always be on the lookout for how you can improve your products and deliver a better service. New packaging, exciting new features, or additional services – you name it. Secondly, __you must constantly invest in marketing your brand on different advertisement frontiers__.

That approach costs you in resources as well as manpower. __Repeat customers are already familiar with the value you offer__. Meaning your advertisement resources can be invested elsewhere to generate more revenue.

Improving your product is another way your repeat customers help you preserve resources. __Research and development of new products is a lengthy and expensive process__. Here’s where brand patrons can help you. Loyal customers help you do just that by offering insightful feedback. 

__By communicating more with your customers, both parties can benefit__. Your customers will feel heard and resonate with your brand more and you will gain insightful feedback. 

![Inarticle-feedback](//images.ctfassets.net/scrf7o05zai3/b76odCjF1LIFhUSTHlJUH/9a2eafd9977d06b27941e520c28ed989/ArticleIn.jpg)

Layerise leverages these benefits in the favor of your brand and keeps you one step ahead of the competition by providing you with customer feedback that gives you better insight into what your customers want from your brand. 

Be it a new product range or making changes to existing merchandise, understanding the needs and expectations of your client base helps you deliver exactly what they value.

### 2. Repeat customers don’t come back alone
[Every relationship is built on trust](https://www.business.com/articles/returning-customers-spend-67-more-than-new-customers-keep-your-customers-coming-back-with-a-recurring-revenue-sales-model/). The one you have with your clients is no different. The good news is that __once you win the trust of your customers, they will be more than happy to recommend your brand to friends and family__.

__It’s a fact that [word-of-mouth helps bring in more business](https://www.yotpo.com/resources/word-of-mouth-marketing/) than the most laser-focused marketing ever can__. Working on your customer retention is even more crucial if your business is not a brick-and-mortar store. Even though things are improving on the e-commerce scene, trusting online businesses can still be a leap of faith for most customers. Your [brand’s patrons bring back 50% more new customers than single-time buyers](https://media.bain.com/Images/Value_online_customer_loyalty_you_capture.pdf).

__Once you build that trust with customers through the quality of your products and excellent customer service, you recruit them as free brand ambassadors__. According to this report by Yotpo, [60% of customers are quite vocal about the brands they love](https://www.yotpo.com/blog/customer-loyalty-survey-data/) among their friends and family.

__Social media and online reviews add a new dimension to this equation__. Brand patrons can now share their buying experience with everyone on their friend list. That augments the value of repeat business and what it can do for your brand image.

### 3. Repeat customers are bigger spenders

Just a [5% increase in your customer retention rate could mean an average increase of 75%](https://media.bain.com/Images/Value_online_customer_loyalty_you_capture.pdf) in your bottom line. That’s possible because repeat customers are easier to sell to. They often spend more in your physical store as well. Investing in repeat business is a surefire way to reach your business goals while spending less.

Think about it. When trying out a new brand, would you feel comfortable spending heavily? Probably not because you don’t want to risk ending up disappointed. Your customers think the same way. __A customer's first purchase from you is most likely not a large one__.

Once they approve of your product’s quality, features, services, and experience you offer, they will be more comfortable making larger purchases. That’s where most of your profits will come from and how your marketing strategy will be a success.

## Layerise helps you retain your customers 

Repeat business [is not just good luck or great products](https://www.constantcontact.com/blog/repeat-business/), it’s a science and a skill you can hone as well. Layerise helps you improve your customer retention rates by creating a superior customer experience. 

__With Layerise, brands can collect relevant customer data and leverage that information to create personalized shopping experiences__. By combining unique customer experience abilities with CRM and marketing, Layerise can help brands establish strong customer relationships with their clients and build continuous revenue streams.

__Layerise can help you offer your customers instructional and interactive content, self-service support, and real-time 24/7 assistance through the chat feature__. With the data collected during the onboarding process you can also build automated marketing campaigns based on their target audience, make their send-outs personal, and increase conversions.

The advantages of getting more repeat business are the same across different industries and companies. __Layerise uses first-party customer data that guide your business and marketing strategies__. Ready to up your customer retention game? [Book a free demo](https://www.layerise.com/) now!

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