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How to Increase Customer Lifetime Value (CLTV) for Your Shopify Enterprise Store

October 28, 2024

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In the competitive industry of direct-to-consumer (DTC) eCommerce, particularly for subscription-based brands, Customer Lifetime Value (CLTV) is one of the most crucial metrics to focus on. Increasing CLTV means maximizing the value that each customer brings to your DTC brands over time, which is a great way to increase profitability without the need of continuously acquire new customers. For enterprise shopify stores, Strategic initiatives for improving CLTV can yield exponential growth. 

We will explore effective strategies for increasing CLTV, tailored for shopify DTC brands selling subscriptions in this blog. 

1. Leverage Advanced Customer Segmentation

Treating all your customers as same can limit your growth potential as not all the customers are same. Use Advanced subscription analytics and customer data to segment your subscribers into categories. You can try segmenting by: 

  • RFM value: Identify your most valuable and loyal customers.
  • Product: Tailor offerings based on their buying history and preferences. 
  • Engagement: Segment based on how they interact with your emails, social media and other communication channels.

These segments allows you to personalize your marketing efforts, optimize campaigns, and offer specialized products or incentives to different customer groups which can help boost loyalty and customer engagement. 

2. Implement Subscription Tiers and Upselling Opportunities

Introducing a tiered subscription plan in your subscription business could be an excellent way to increase CLTV. Offering premium plans with added benefits can encourage customers to upgrade. 

  • Exclusive products or limited-edition items
  • Priority customer service
  • Faster shipping or discounts on other products

Pair this with upselling opportunities that suggest upgrades, add-ons, or complementary products based on customer preferences or past behaviour. 

3. Optimize Retention Strategy

Retention is the key to increasing CLTV. The longer your subscriber stays active, the more value they provide. Implementing these robust retention strategy can have positive impact on CLTV: 

  • Churn prevention emails: With the help of tools like Klaviyo and Mailchimp to automate personalized emails you can create a retention campaign like offering them a discount when customers show signs of churn. 
  • Delight Campaigns: Sending personalized notes, unexpected gifts or discounts and offers can create a positive experience for your subscribers and ensures customer loyalty. 
  • Pause Subscriptions: Instead of cancelling, encourage customers and give them option to pause their subscription for a specific period of time. Loop Subscriptions can easily manage this feature. 

4. Provide Seamless Customer Experiences

A great customer experience which ultimately leads to a great customer satisfaction can be a significant factor in increasing CLTV. With shopify plus and good customer portal, dtc brands can leverage advanced customization options to create seamless and personalized customer journeys. 

  • Easy Checkout: Makes it easy for customers to update their subscriptions details, add to their orders and make quick purchases. Utilize one-click upsell options to make customer experience flawless. 
  • Customer Feedback: gather regular feed back from customers, this can help you quickly resolve issues and identify areas of improvement in your offerings. Tools like gorgias can help you easily gather reviews and feedback. 

5. Build a community

The most powerful way to increase CLTV us to foster a community around your brand. Since subscription business have a recurring relationship with their subscribers- they can use this as their advantage to create a foundation for community building. Here how you can get started:

  • Exclusive perks and discounts: Offering member only content, virtual events, early access and special discounts. 
  • Loyalty Program: Shopify apps like Smile.io or LoyaltyLion can help you create referral and loyalty programs that rewards customers and enhances customer retention and engagement. 
  • Social Media Engagement: Social media is a great way to build an online community where subscribers can interact with your brand and with each other. 

6. Referral Program 

Referral programs are a great way to increase CLTV by turning your customers into brand advocates. When subscribers refer new customers, they increase the overall customer base and their engagement with the brand. Build referral programs that reward subscribers with discounts, free products, and exclusive perks for every successful referral.

Shopify apps like ReferralCandy or Rivo  helps you set up a smooth referral process that integrates with your subscription model. 

7. Data-driven Personalization

Harness the power of data to offer highly personalized experiences. Advanced subscription analytics can help you understand insights into customer behaviour, preferences, and purchasing patterns. You can use these insights to create marketing campaigns that

  • Send personalized product recommendations based on the purchase history. 
  • Offer promotions around renewal periods to encourage early commitment. 
  • Create a re-targeted engagement email campaign for inactive subscribers, offering them discounts or special promotions to renew subscriptions. 

8. Post-Purchase Engagement

Post-purchase experience refers to the activities, brand interactions and experiences that take place after a customer buys something from the store. Keep your customers engaged and excited with the following: 

  • Automated Thankyou emails: Express gratitude with personalized thank-you messages that build rapport. 
  • Cross-sell campaigns: Send communication campaigns featuring related products or add-ons that could enhance their subscription. 
  • Post-purchase surveys: Ask for feedback and reviews on their experience and use that data to improve your service. 

9. Pricing Strategies 

Consider testing different pricing models to find the ideal balance between customer retention and revenue generation. Testing different subscription pricing tiers or offering limited-time offers/discounts to see how price changes affect churn rates. Pricing optimization can significantly impact CLTV. 

10. Measure and Optimize Regularly

Tracking your progress continuously by measuring CLTV, churn rate, and average order value(AOV) can help you pinpoint areas of improvement and experiment with new strategies. 

Utilize subscription analytics to monitor customer lifetime value and make data-driven decisions and continuously optimize your approach based on real-time performance. 

Conclusion

By implementing these strategies and tactics, Shopify eCommerce brands with subscriptions can unlock the potential of Customer Lifetime Value (CLTV).

CLTV is a marathon not a sprint. Focusing on building long-term relationship with your customers through personalization, providing exceptional experiences, and a strong sense of community will not only increase sales but also foster a loyal customer base. 

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Written by
Emma Johnson
Head of Marketing

Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.