Increase customer lifetime value with email marketing
Posted: Tue Dec 03, 2024 10:46 am
The cost of standing out in the digital environment, amidst so much competition, is increasing and may become unfeasible for small and medium-sized e-commerces . So, how is it possible to generate profits in a scenario like this? One way is to transform a one-time buyer into a recurring customer, increasing the so-called consumer lifetime value .
Read more:
>> Payment methods: which ones to offer and how can they help?
>> Overdelivery with e-mail marketing: how to apply it to e-commerce
Indeed, increasing a customer’s lifetime value can be a challenging task, but it is not impossible. In this article, we will learn what lifetime value is, how important it is for your business, and what role email marketing can play in boosting it.
Content
What is consumer lifetime value?
10 Email Strategies to Increase Lifetime Value
1. Welcome email
2. Customer Service
3. Personalized emails
4. Cart Abandonment Recovery
5. Re-engage inactive customers
6. Post-purchase engagement
7. Upselling and Cross-selling
8. Referral programs
9. Loyalty programs
10. Replenishment emails
How to calculate consumer lifetime value?
Why is lifetime value an important metric?
What is consumer lifetime value?
This is a metric that measures the total amount of business generated by a customer throughout their relationship with your brand. In general, the lifetime value of a customer should be greater than 3 times the cost of acquiring that customer. For example, if you incur a cost of R$100 to acquire each new customer, that same customer should spend at least R$300 over the course of their business relationship with you.
After all, everything that is valuable – in this case, customers – ends up generating some expense. We know that, for a company to sustain itself, the value that comes in must always be greater than the value that goes out. And this balance of accounts can be achieved through continuous and frequent spending by a customer for as long as possible.
10 Email Strategies to Increase Lifetime Value
There are two main factors that increase a customer's lifetime value : increasing the average ticket size and increasing the length of time that customer spends with your brand. But how can email marketing contribute to this process? By creating a flow of emails that guide the buyer to where you want them to go. Check out how you can use emails to your advantage to increase lifetime value:
1. Welcome email
Welcome emails help generate greater engagement than regular emails, since the contact has recently registered on your website and is expecting some kind of notification or even a bonus. To get an idea of the importance of this type of email, a survey by Experian showed that:
The average open rate for a welcome email is over 57%, while the open rate for other emails is around 14%;
The average click-through rate for welcome emails is 14%, while the same rate for other emails is around 2%;
The revenue generated from welcome emails can be up to 8 times higher compared to revenue from other emails.
Therefore, taking advantage of welcome emails is a simple strategy that can greatly help increase revenue per customer.
2. Customer Service
Providing positive experiences is the surest way to build long-term relationships with your customers. In this sense, providing excellent customer service via email by being attentive, responding promptly, and showing empathy helps ensure that buyers stick with your brand and continue to do business with you in the future.
3. Personalized emails
Email personalization isn’t just about president email lists addressing the sender by name. It takes much more to be effective. So, analyze the consumer’s search and purchase history to find out what their wants and needs are.
With this data in hand, you can create email campaigns based on previously purchased items, offering gifts, discounts or bundled sales. Remember: a customer who engages in a more precise and in-depth way is more likely to have a long-lasting relationship with your company.
In short, targeted campaigns leverage relevant data to personalize the customer experience and can lead to higher open and click-through rates. When customers feel like they’re more than just a number to you, you’ll see increased engagement and loyalty.
4. Cart Abandonment Recovery
In Brazil, 85% of consumers give up on completing their orders at the final stage, according to the Cart Abandonment survey by Opinion Box. 15% of buyers repeat this practice regularly.
According to the study, higher-than-expected shipping costs are one of the main reasons for this high dropout rate. Among the consumers interviewed, 66% said they would stop completing a transaction for this reason.
Often, when a customer abandons their cart, all they need is the right nudge to maintain a long-term relationship with your brand. This is where abandoned cart emails come in, which play an important role in leading to a recovered sale.
Not only do these types of emails remind users about their abandoned items, but you can also use them to share additional information to help users make their purchasing decisions. Additionally, these campaigns create great cross-selling opportunities by offering other useful products in the same email.
5. Re-engage inactive customers
Customers who are reactivated are naturally more likely to increase the average lifetime of their relationship with your business. In this context, you can take advantage of their valuable feedback to not only improve their experience with your brand, but also increase the lifetime value of other consumers.
This is also an excellent opportunity to close the loop with dissatisfied customers. Those who have decided to definitely stop buying from you should be eliminated from your contact base so as not to harm the open and click rates of your campaigns.
6. Post-purchase engagement
Another good strategy to increase the consumer's lifetime value through email marketing is the post-sale cross-offer tactic, such as "people also bought". By creating packages, combos, and product kits, you increase the purchase value, encouraging future transactions.
This way, everyone wins: firstly, the customer, who gets convenience and savings from the combined purchase. And then, the retailer, who manages to generate a memory of their brand in the mind of that buyer.
7. Upselling and Cross-selling
But it’s not just after the purchase that you should recommend related products. After all, this is another way to close more deals, maintaining a long-term relationship with consumers. Invest in upselling, suggesting new products with added value, and cross-selling, offering add-ons to the purchase, and see how you can increase the value of your customers’ purchases.
Read more:
>> Payment methods: which ones to offer and how can they help?
>> Overdelivery with e-mail marketing: how to apply it to e-commerce
Indeed, increasing a customer’s lifetime value can be a challenging task, but it is not impossible. In this article, we will learn what lifetime value is, how important it is for your business, and what role email marketing can play in boosting it.
Content
What is consumer lifetime value?
10 Email Strategies to Increase Lifetime Value
1. Welcome email
2. Customer Service
3. Personalized emails
4. Cart Abandonment Recovery
5. Re-engage inactive customers
6. Post-purchase engagement
7. Upselling and Cross-selling
8. Referral programs
9. Loyalty programs
10. Replenishment emails
How to calculate consumer lifetime value?
Why is lifetime value an important metric?
What is consumer lifetime value?
This is a metric that measures the total amount of business generated by a customer throughout their relationship with your brand. In general, the lifetime value of a customer should be greater than 3 times the cost of acquiring that customer. For example, if you incur a cost of R$100 to acquire each new customer, that same customer should spend at least R$300 over the course of their business relationship with you.
After all, everything that is valuable – in this case, customers – ends up generating some expense. We know that, for a company to sustain itself, the value that comes in must always be greater than the value that goes out. And this balance of accounts can be achieved through continuous and frequent spending by a customer for as long as possible.
10 Email Strategies to Increase Lifetime Value
There are two main factors that increase a customer's lifetime value : increasing the average ticket size and increasing the length of time that customer spends with your brand. But how can email marketing contribute to this process? By creating a flow of emails that guide the buyer to where you want them to go. Check out how you can use emails to your advantage to increase lifetime value:
1. Welcome email
Welcome emails help generate greater engagement than regular emails, since the contact has recently registered on your website and is expecting some kind of notification or even a bonus. To get an idea of the importance of this type of email, a survey by Experian showed that:
The average open rate for a welcome email is over 57%, while the open rate for other emails is around 14%;
The average click-through rate for welcome emails is 14%, while the same rate for other emails is around 2%;
The revenue generated from welcome emails can be up to 8 times higher compared to revenue from other emails.
Therefore, taking advantage of welcome emails is a simple strategy that can greatly help increase revenue per customer.
2. Customer Service
Providing positive experiences is the surest way to build long-term relationships with your customers. In this sense, providing excellent customer service via email by being attentive, responding promptly, and showing empathy helps ensure that buyers stick with your brand and continue to do business with you in the future.
3. Personalized emails
Email personalization isn’t just about president email lists addressing the sender by name. It takes much more to be effective. So, analyze the consumer’s search and purchase history to find out what their wants and needs are.
With this data in hand, you can create email campaigns based on previously purchased items, offering gifts, discounts or bundled sales. Remember: a customer who engages in a more precise and in-depth way is more likely to have a long-lasting relationship with your company.
In short, targeted campaigns leverage relevant data to personalize the customer experience and can lead to higher open and click-through rates. When customers feel like they’re more than just a number to you, you’ll see increased engagement and loyalty.
4. Cart Abandonment Recovery
In Brazil, 85% of consumers give up on completing their orders at the final stage, according to the Cart Abandonment survey by Opinion Box. 15% of buyers repeat this practice regularly.
According to the study, higher-than-expected shipping costs are one of the main reasons for this high dropout rate. Among the consumers interviewed, 66% said they would stop completing a transaction for this reason.
Often, when a customer abandons their cart, all they need is the right nudge to maintain a long-term relationship with your brand. This is where abandoned cart emails come in, which play an important role in leading to a recovered sale.
Not only do these types of emails remind users about their abandoned items, but you can also use them to share additional information to help users make their purchasing decisions. Additionally, these campaigns create great cross-selling opportunities by offering other useful products in the same email.
5. Re-engage inactive customers
Customers who are reactivated are naturally more likely to increase the average lifetime of their relationship with your business. In this context, you can take advantage of their valuable feedback to not only improve their experience with your brand, but also increase the lifetime value of other consumers.
This is also an excellent opportunity to close the loop with dissatisfied customers. Those who have decided to definitely stop buying from you should be eliminated from your contact base so as not to harm the open and click rates of your campaigns.
6. Post-purchase engagement
Another good strategy to increase the consumer's lifetime value through email marketing is the post-sale cross-offer tactic, such as "people also bought". By creating packages, combos, and product kits, you increase the purchase value, encouraging future transactions.
This way, everyone wins: firstly, the customer, who gets convenience and savings from the combined purchase. And then, the retailer, who manages to generate a memory of their brand in the mind of that buyer.
7. Upselling and Cross-selling
But it’s not just after the purchase that you should recommend related products. After all, this is another way to close more deals, maintaining a long-term relationship with consumers. Invest in upselling, suggesting new products with added value, and cross-selling, offering add-ons to the purchase, and see how you can increase the value of your customers’ purchases.