Building a Resilient Business: Three Steps for Maximizing Customer Lifetime Value

During the economic downturn caused by COVID-19, businesses have realized they need to invest more in increasing customer lifetime value (CLV) to maintain profitability through unexpected market upsets. The Pareto Principle states that 20 percent of causes result in roughly 80 percent of following outcomes, meaning that 20 percent of sales efforts will result in 80 percent of sales successes or, in this case, 20 percent of customers will deliver 80 percent of revenue. While this might not be completely accurate, it is true that some customers could provide more value than others in the long term. Identifying the most profitable customers and making efforts to increase their loyalty will be highly valuable to any company. However, many businesses have yet to master this process./p>

Below are three key steps for increasing customer lifetime value through elevated customer experiences.

1. Invest in Understanding Your Customer Base.

If you don't understand who your customers are, it's going to be difficult to persuade them make purchases, especially when their budgets are tighter than usual. Therefore, it's wise to invest in customer research to ensure you are meeting the needs of your customer base and encouraging them to return for multiple purchases. When you know what your customers' priorities are, such as why they are purchasing and what their personality is, you can tailor your marketing and customer experience (CX) approach to build strong relationships and establish repeat customers.

It's essential to develop a comprehensive understanding of what customers expect from customer support agents, whether the customers' needs are being met, and how employees can improve CX to meet customer expectations, especially in contact centers. In fact, most customers (54 percent) are dissatisfied with the service they receive from contact centers. Contact centers need to adjust the levels of service they provide customers or risk losing them. Rather than chatbots or email, phone calls are still the preferred method of communication for customers seeking help. Customers also prefer to sign up for callbacks rather than waiting on hold.

When customers call a contact center, their priorities are to talk with a skilled agent and to have their problems solved quickly. However, when the agent doesn't have all the resources and information to help them in a timely manner, customers get impatient and frustrated. Collecting data and customer feedback is crucial so managers can assess the company's customer service practices, metrics, and policy standards to make changes where necessary.

2. Offer Customers Incentives for Being Loyal.

It's human nature to respond to positive reinforcement. So, it's a good idea to reward your customers for their loyalty. Promotions, such as discount codes for repeat orders, exclusive early access to sales, free samples, or expedited shipping, will make customer experiences with your company stand out against the experiences provided by competitors.

Companies like Amazon, Zappos, Nordstrom, and Apple have mastered the art of going above and beyond with customer service programs. Sometimes this means that CX initiatives don't always have a one-to-one return on investment (ROI). It takes creative thinking and customer journey mapping to identify customers' wants and needs. For example, Apple realized that easily accessible and free customer support exponentially improves customer experience, so they've created a culture of ease and commitment to customers success. While they don't always see a direct ROI at the store, they see it in brand loyalty and evangelization.

People always remember positive experiences. Offering unparalleled customer service, easy returns, and discounts for returning customers are some of the most effective ways to encourage customers to continue to use your brand over the competition.

3. Go the Extra Mile with CX on Social Media.

Customer experience on social media is no longer something businesses can afford not to prioritize. Currently, there are roughly 3.9 billion social media users worldwide, which means that about half of the world' population is using social media. Publishing high-quality, valuable content for customers on social media and engaging with them will help you stay top of mind. It's also a great way to get ahead of customer service issues before they escalate.

Social media reaches across all generations, with 90.4 percent of millennials, 77.5 percent of Gen-X, and 48.2 percent of baby boomers active on social media. Gen-Z has the most social media users at 97 percent. Many millennial and Gen-Z customers comment and direct message companies instead of using call centers, so i's an ideal way to engage with customers.

Additionally, social media is an open opportunity for leaders to get to know their customers better and gain an understanding of customers' lives. Social media provides a platform for executives and employees to authentically engage with the public with product updates and news, educational content, and insight into the inner workings of the company.

CLV is one of the most important metrics to measure at any growing company, and customer support and success teams have direct influence over this during customer journeys. Especially in the age of COVID-19, it's paramount to invest in digital CX programs that will foster brand loyalty and maximize customer lifetime value. CX leaders should prioritize listening to their customer base and make sure their team is responsive on social media and traditional channels to stay connected with customers during these uncertain times.

Dennis Reno is senior vice president of customer experience at Cyara. He has more than 30 years of experience in areas like client engagement, technical support and training, and account management, having held leadership roles at companies such as OneLogin, Arxan Technologies, Oracle, and Microsoft.