Everyone’s heard, “it costs more to get a new customer than to retain your existing customers.”
There are plenty of stats out there, but you don’t need to read those to understand this intuitively.
People who bought from you have experience with your brand. If you have a good product, and they’re pleased with it, it’s not that hard to persuade them to buy again…
And one of the best ways to do so is via email.
But to do this right, you’ll want to keep a handle on your Customer Lifetime Value.
So, below, I’ll talk about Customer Lifetime Value and some ways to improve it via email marketing.
What is Customer Lifetime Value
Customer Lifetime Value (or CLTV, but I prefer LTV for simplicity) is the total amount of revenue you expect 1 customer to generate throughout their relationship with your brand.
The formula’s complex, so let me copy and paste from a previous blog post of mine:
“LTV has a much longer formula:
LTV = [ARPU * GM] * CL
We’re about to break it down:
- ARPU: Average Revenue Per User (over a period of time, generally a month)
- GM: Gross Margin
- CL: Customer Lifetime
Let’s break it down further.
ARPU = Monthly revenue / # of customers
GM = Gross profit / revenue
CL = 1/Monthly Churn
(By the way, monthly churn = # of customers that leave your brand that month / total # of customers that month)”
Now that you have a better grasp of LTV, let’s get into some ways to boost it with email.
1. SEGMENTATION
First, segmentation is one of the single most powerful ways to boost your LTV. It preempts most other efforts.
That’s because segmentation lets you personalize. It lets you get the right offers in front of the right people at the right times.
For instance, if you’re selling copywriting training…
You wouldn’t sell your high-ticket, advanced coaching to someone who barely knows what copywriting is.
You might start them with a lower-cost course.
If they buy, they’d go into a different segment to reflect that.
2. Send “Check-In” Emails
Your customer bought something a while back. Here’s a good idea:
Ask them how that product’s treating them?
This does plenty for your business.
First, it keeps your customer engaged. They may respond and tell you it’s working great, or even if they have negative feedback. No matter the case, this could be good for deliverability, improving your product, or testimonials/positive reviews.
What’s more, of course, is it’s a selling opportunity.
For instance, if it’s a consumable product, you can sell them on their next order. You could also cross-sell them on other products.
If it’s not, maybe you present them with the next logical product in their journey. Maybe they completed a lower-level, lower ticket course. Now, you upsell them on the next course.
Or perhaps you run a SaaS company. You better be checking in on them throughout their subscription and upsell them when the time is right.
The best part about this?
You can automate these emails with a little bit of segmentation/tagging work in your ESP. More LTV with less effort!
3. Make Your Best Customers Feel Special
Who doesn’t love to feel elite and exclusive? It’s why people buy front row seats, first-class plane tickets, VIP passes, etc.
Sure, these come with extra luxuries, but deep down, you feel a bit more proud and “cool” when flying first-class. Don’t deny it.
You can apply this same exclusivity to your own customers.
Find out who your top customers are and reward them with special
But here’s the thing: don’t tell anyone about the rewards for being a top customer.
First of all, it’ll be a welcome surprise for your top customers. I don’t know about you, but I love random gifts.
However, this builds much more hype and excitement than if everyone knew about the top level. It makes your best customers feel like they’re part of secret “club,” and they’ll be happy to
They may even tell others — and that’s fine. As long as the details aren’t public, it’ll build more interest.
Consider the American Express Black Card. We know it exists, we know it’s elite (invite-only), and we know the features it offers are insane (I heard a cardholder got to skip a massive line at a famous Las Vegas nightclub!)
But we don’t know the specifics. We don’t know the requirements, nor do we have an exact list of benefits.
With what I laid out in this section, you’re tapping into the same type of effect.
(NOTE: You can expand this out into multiple tiers if you want. And you don’t have to make it secret, either. In fact, you can have the lower levels be public and the top level be secret. It’s your business, so experiment until you get it right!)
4. Abandoned Cart/Search Sequences
If your business is a mighty ship, abandoned carts and searches are holes in the hull.
You see, plenty of customers make it onto your website, and maybe even get ready to check out…
But then their phone rings.
Or they gotta run to the bathroom.
Or, god forbid, someone breaks into their house.
Whatever it is, they never finished the transaction…
And they probably never will…
Unless you hit them with some emails to remind them of their search or abandoned cart.
Once again, these are automated sequences. Set them and forget them (except for a little optimization every so often).
Once they’re in place, you’ll scoop up a few more dollars from every customer you come across.
5. Save Your Best Sequences/Broadcasts/Campaigns
Keep an eye on your analytics and make note of your best sequences, broadcasts, and campaigns.
You see, every sequence, broadcast, and campaign you write is a new marketing asset.
You can reuse them.
Most customers won’t even notice (unless you make it a part of your branding). I’ve got a sharp memory, and I don’t remember 90% of the emails that hit my inbox.
And the customers that do notice won’t care.
Sure, you might need to change a few sections for it to make sense in context (time, place, current events, etc.)…
But if it works, it works, and you can use those emails again for easy money.
For instance, if you write a killer Black Friday campaign, you can easily reuse that next year with perhaps some minor tweaks.
Many of the same customers will buy again from you with little investment on your part…
Which boosts your marketing ROI and your customer LTV.
Email: One of Your Best LTV-Enhancers
Email is one of your best LTV-enhancers because you can make a personal connection with customers and automate much of the process.
At the end of the day, you get a larger number of more loyal buyers, boosting the $$$ you earn per customer.
If you want help writing emails that boost LTV…