Customer acquisition costs have increased by as much as 60% in the last five years. And today, with rising media costs, broader economic challenges, and new privacy/tracking restrictions by major tech companies like Apple and Google, it’s becoming even harder.
It would seem a wise time for businesses to prioritize customer lifetime value—a metric that measures how much you can earn from a current individual customer over their lifecycle. This helps companies improve decision-making, grow loyalty, boost revenue, and cut costs.
Achieving optimal customer lifetime value involves above-average customer service, choice, and customized communications, from how you present a bill to how a customer pays it and everything in between.
Ramp up your omnichannel offering
There’s no riddle here: Giving customers what they want will increase the probability of continuing business with you. And we all know that consumers want choice and convenience. To improve customer lifetime value, consider diversifying across bill presentment and payment, communication, and customer service channels.
Regarding bill presentment and payment, continue offering traditional options like print and in-person, but also consider digital means, creating more of an omnichannel approach. This blog post expands on methods and channels such as credit card, debit card, ACH, and Apple Pay, as well as mobile, SMS, and web.
The same goes for the channels you use to communicate with customers. Yes, digital ads should still be part of your toolbox, but these costs are rising, too. Amp up your marketing mix to include email, social media, SMS, and print to increase reach and offset costs. The ability to engage with customers across channels and then analyze which ones most resonate at the individual level increases the chances of them receiving and acting on your message.
Customer service channels should similarly cover all bases, from those individuals who want to hop on the phone to those who want to type in a web chat. In an omnichannel world, you must be available via website chat, email, text, social media, phone, and in person. And make sure your customer service staff is well-trained, responsive, and dedicated.
Remind them
Do customers need to be reminded to pay? This is unsurprising with so much happening in the economy and the world. Don’t vilify customers—instead, send them reminders. Keeping with the theme above, do this across channels, prioritizing the ones individual customers most use. With the right technology, you can even send automated payment reminders at specific points in the bill pay timeline. Trust us – they’ll appreciate the courtesy and hopefully avoid failure to pay in the future.
Personalize, personalize, and personalize some more
Your customers want you to understand them and anticipate their needs. And you should be able to do that with the correct data managed in one centralized system that can aggregate everything you know about a customer. This includes details like their birthday, location, if they have children and their age ranges, income level, the types of products and services they use, communication preferences, how they tend to pay, and so much more. The key is to use all that information to orchestrate cohesive messages across the communication channels mentioned above.
Upsell and cross-sell more
Upselling and cross-selling can increase the money customers spend with your business. Upselling is selling a premium-priced version of a specific product or service, while cross-selling is selling a similar product or service.
Now, there’s nuance to take into account here. We don’t suggest trying to upsell or cross-sell to customers failing to pay their bills on time or at all. This is where prioritizing your highest-value customers comes in. The ones who consistently spend with and pay you, especially early or on time, should be at the top of your upsell and cross-sell lists. These customers may have the discretionary income to take advantage of these additional offers.
Check in regularly
A large factor in keeping customers is staying ahead of any potential issues. Don’t hit up customers when you want to sell. Instead, reach out after key moments like purchasing a new product or service or interacting with customer service. Send out customer satisfaction surveys like Net Promoter Score, a one-question survey designed to determine the likelihood that a customer would recommend your business to friends or colleagues. Increasing the NPS score can help you reduce churn and expand your client base.
Run a loyalty program
Loyalty begets loyalty. If you show customers you appreciate them sticking by your side when they have other options, they’ll reward you with more of the same. You can design a loyalty program in whatever way makes sense for your business and customers. Here are some ideas:
- Balance transfers for customers who pay on time
- Elite card offers
- Discounts for paying bills or loans early
- Exclusive offers and discounts for complementary products/services
Customer lifetime value with OSG
OSG’s customer engagement platform is your one-stop shop for increasing customer lifetime value. We empower you to manage the entire customer lifecycle from start to finish and help you turn individual transactions into important and connected moments of engagement. Get in touch with us to learn more.