The Impact of Customer Value on Business Revenues
Ever since the COVID-19 outbreak, the world has changed somewhat dramatically.
While there are businesses who are struggling to embrace the change, there are those who have adapted to the situation and have seen significant growth amidst the pandemic.
Perhaps the industry that benefited the most from this is eCommerce.
The pandemic hasn’t just transformed the way we do business. It has also caused a change in customer behavior. Aesthetics and site design, while important, aren’t just the only deciding factors. Not anymore.
Customer value is the driving force for most businesses today.
Customer Value (CV) and It’s Importance
Essentially customers lifetime value equates to the benefits you’re gaining with difference to the costs incurred.
CV is a highly-important metric. Without knowing the current value of your customers, how else will you create additional value for them?
While we can talk praises of this concept all we want, it is important to note that CV is the most underrated eCommerce metric. In reality, however, it’s the most valuable thing that a shop can have. The likes of Amazon and Costco are market leaders for a reason – they’ve both understood, and worked on this metric aggressively.
It’s a humanistic approach where, rather than focusing on sales, you focus on the human element involved in the purchase.
How Can You Improve Customer Value?
If you’re reading this, the chances are your business is not as big as Amazon or Costco. Regardless of your business position, you can create a customer value strategy for your store that’s bound to gain repeat and loyal customers.
There are three major ways you can go about implementing it:
- Optimizing the customer journey
- Streamlining the customer experience
- Introducing a points, rewards, and loyalty program on your store
Optimizing the Customer Journey
The following are some powerful strategies you can apply to increase customer value of your store.
This involves the effective use of data. From building customer segments, and user personas, motivations, to creating a customer base journey map, building experiences, and A/B testing the maps – audience segmentation helps you target customers on a more personal level.
Engaging Your Buyers:
Not bothering to keep your buyers engaged is a serious folly. Fast response-times, giving them support, solving their problems, and gently recommending them additional purchases are just the tip of the iceberg when it comes to keeping your customers engaged.
The end result of buyer engagement results in customer retention, improved conversions, and high-quality leads for your business.
Within the funnel, the individuals most-likely to purchase lie directly in the middle. Ensuring that you employ active conversion strategies in the middle of the funnel ensures that a handsome amount of people just “window-shopping” will also purchase from your store.
That said, while you should focus on your mid-funnel strategies, it does not imply that you leave the other parts of your funnel unchecked. Creating a balance with your funnels pays out in serious dividends.
Streamlining the customer experience
The other thing you need to do in order to increase customer value is to make the process from product discovery to eventual purchase as seamless as possible. Here are a few ways you can go about doing that:
Understanding your Customer
You don’t have to do anything fancy and superficial. All you have to do is create a customer experience that’s memorable, authentic, and true to heart – in short, be as human as you can be online.
You can do so by being up-to-date with your customer interactions, their history, their preferences, and their behavior. Gaining an understanding of such metrics allows you tailor the experience from customer to customer.
Make Self-Service a Reality
Statistics show that 90% of online consumers want self-serving customer support experience with eCommerce. Self-service can include anything from FAQs, knowledge-based articles, infographics, and other related forms of informational content that can prove helpful to your store audience.
Always maintain a level of flexibility with regard to your store operations. The only thing constant in the world of eCommerce is change. Knowing this, it’s important that you be flexible with how your customers pay for your products and services. Some might be inclined to subscribe to your products while others might prefer a direct purchase. Some may prefer PayPal over Stripe or vice versa.
Point is, the more flexible you are, the more are your chances to increase your customer lifetime value. At the end of the day, it’s all about giving customers the convenience in the choices they make.
Introducing a Points, Rewards, And Loyalty Program on Your Store
Last, but not the least, we cannot stress the importance of the concept of reciprocity. Similar to real world scenarios, if you do something nice for a person, you expect it to be reciprocated in one form or another right?
In the business world, the concept of reciprocity carries crucial importance. It implies that if a customer performs a particular action for a business, then the business reciprocates doing something for the customer as well. This give and take scenario ensures healthy customer-owner relationships which lead to brand loyalty and repeat purchases.
Perhaps the best way you can create such a reciprocal relationship is through the introduction of points, rewards, and referral functionality on your store. If you’re a WooCommerce store owner, you can introduce such a program on your store using Referral System for WooCommerce.
With this plugin, you can let your customers earn points for actions they take on your store. For example, they can earn points if they sign up to your store, it’s their birthday or any such event. The customers, in turn, can exchange those points for rewards in the form of discounted products. A hypothetical example can be a 1% discount for every 50 points. Again, with the plugin, you can change the settings according to your preferences. This results in increased store activity, customer engagement, and purchase volume.
While the points and reward system is indeed beneficial, the most powerful feature of the plugin is the fact that you can gain new customers by incentivizing existing customers to refer your store products to their friends, family members, or acquaintances. The process goes something like this: if the existing customer (referrer) refers a product from your store to their relatives (referee), and they sign up to your store, then it not only means points for both the referrer (referral points) but also the referee (sign-up points).
Once they have signed up to your store, you can retarget them with the help of email marketing strategies that include special offers and bonuses on products and referrals.
Wrapping Things Up:
Customer value addition is an underrated topic and we feel that it needs to be discussed more. In this article, we discussed the various strategies that ensure value-addition in a customer’s purchase as well as overall store experience.
While all of these strategies are beneficial in their own right, it is always important to remember that you can’t rely on them in a bubble. Whenever you apply them, always make sure to keep a check on your Google Analytics on whether or not the strategies are working. Having a grip on your customers behavior and your response to them strategies can make or break your business.
Nabeel Al Ahmed – Being a Passionate tech Savvy and WordPress community expert at Codup.co actually helping people to take guides from my case studies, savvy I always love to share my knowledge and tech experience for eCommerce development agencies playing with the analytical data and digging into useful insights is his most favorite thing to do. Besides work, I am passionate about contributing to the communities and helping others.