For subscription businesses, maximizing customer lifetime value (CLV) is essential for success. And the key to get there is continuous customer satisfaction leading to high customer retention.
Making sure your customers are successful and active is something worth investing in: attracting a new customer will cost your company five times more than keeping an existing customer. Furthermore, selling to existing customers is about 50% easier than selling to brand new prospects.
Here are some of the ways you can maximize your CLV.
It should be a short step from sign up to customers getting value from your product. Map out a simple onboarding process that makes it clear how to use your subscription and get the full value out of it. The faster you can give customers access, the more you can take advantage of their initial interest.
According to Zendesk, consumers rank quality (88%) as one of the two biggest drivers of loyalty. So, if you have a great product that you’re always improving with features that add value, it’s much more likely that your subscribers will continue using your service and stay subscribed.
Figure out what features you can add or improve to enhance your customers’ success with your product. You can do this by surveying both won and potential customers about what they want, what they are willing to pay for and what they will seek value from.
For your existing customers, analyze how they use your product and look for patterns of where people may be frustrated or not engaged.
Zendesk found that customers ranked customer service as the second most important factor for staying subscribed. Ensure your customers can easily get the support they need on the channels they most prefer whether it’s live chat, email, on the phone or through social.
The best mix for your company will depend on your target demographic(s) but figuring it out is well worth it - Harris Interactive says that 56% of participants in a survey said they would switch if a competitor offered more options to get support.
Unlike one-time sales, subscriptions require an ongoing relationship with your customers. This means proactively communicating with them about how to get the most value out of your subscription, how to use new features and showing your appreciation for their loyalty. People are extremely busy and it’s essential to keep your brand and product top-of-mind so that they continue using it.
Offering loyal customers some kind of reward is an extremely powerful way of strengthening your relationship with them. This can be as simple as responding to a tweet from a customer or offering membership to an exclusive ‘club’ that comes with special perks. While you can get pretty creative with incentives, focus on keeping them relevant enough so that users feel like they are getting increasing value by staying subscribed.
Customers will keep returning if you continue to offer value combined with support to ensure they are successful. Thinking ahead and anticipating what customers will pay for goes a long way to enhancing your reputation as well. For example, Netflix rolled out streaming content in its early stages as a free add-on for their existing customers. Although many customers hadn’t seen it offered as a service before, they quickly realized it was something they wanted. That has undoubtedly contributed to Netflix being on the top of the brand loyalty charts and its high subscriber growth.
Customer success starts with effectively acquiring the right customers and then maintaining an unwavering focus on keeping them. The better the experience a customer has with every touchpoint of your service, the more likely they are to stay. Make sure you’re always delivering value, providing exceptional customer service for any roadblocks along the way and building brand loyalty. The result will be lower churn rates and higher CLV.
If you have a subscription based business, here's more information on
