[et_pb_section fb_built=”1″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text admin_label=”Introduction” _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n
It\u2019s exciting to acquire new customers. There\u2019s the competitive spirit rush on the sales floor, being celebrated by peers, and ringing the sales bell. These external motivators, along with the promise of commission, drive sales professionals to make those pitches and close deals. New sales, however, are only a very small slice of the pie.<\/p>\n
Looking at the big picture, Tim Riesterer<\/a>, chief strategy officer at Corporate Visions, says 70 percent to 80 percent of all revenue and growth come from existing customers. In exceptional times, such as the early days of the pandemic, this was up to nearly 100 percent due to so much global uncertainty in business. This makes it more important than ever to understand how to increase the customer lifetime value of existing clients with CLV marketing.<\/p>\n According to Riesterer, resources are disproportionately weighted toward acquisition. The thrill of something shiny and new wins out every time. Salespeople tend to favor finding new clients over working with existing customers who aren\u2019t a large revenue source. These less lucrative customers get handed off improperly when they really need to be nurtured by the sales team member who has disregarded them.<\/p>\n It\u2019s time to break these habits because, according to George Leith<\/a>, former Chief Customer Officer at Vendasta, it is far less expensive to keep a client than it is to find a new one.<\/p>\n[et_pb_section global_module=\"112921 \"][\/et_pb_section]\n [\/et_pb_text][et_pb_text admin_label=”What is customer lifetime value?” _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n Customer lifetime value<\/a>, commonly abbreviated as CLV or sometimes CLTV, is a valuable metric that defines the total revenue a business can reasonably expect from a single customer account throughout its relationship with the company<\/em>. This concept encourages a forward-looking perspective that goes beyond the rush of the initial sale, emphasizing the long-term profitability of marketing to existing customers and maximizing existing client growth.<\/p>\n Understanding CLV is invaluable for making informed decisions about customer acquisition, retention strategies<\/a>, and resource allocation. For example, if the CLV of a client is significantly higher than the cost of acquiring them, it signals a healthy client-agency relationship with a solid positive ROI<\/a>.<\/p>\n By assessing CLV, marketing agencies can prioritize efforts toward nurturing high-value customers and designing personalized campaigns, leading to more effective targeted marketing to existing customers. It enables businesses to focus not just on the here and now, but to consider the broader, longer-term picture of their customer relationships.<\/p>\n A robust understanding of this metric can help agencies identify how to increase sales with existing customers through CLV marketing. Maintaining loyal customers is just as important, if not more so, than acquiring new ones, making CLV marketing an important approach to help your agency reach its growth targets.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”How to increase customer lifetime value with CLV marketing” _builder_version=”4.21.0″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n By now, you know what customer lifetime value is. Next, we\u2019ll walk you through how to increase the customer lifetime value of existing clients so you can start growing your revenue\u2014and profits\u2014without costly acquisitions. With the right strategy, you can turn your existing customers into valuable long-term partners in a relationship you both benefit from. Here\u2019s how.<\/p>\n One of the most difficult but important parts of managing a sales team is ensuring they are connecting with all of their customers. This includes both prosperous accounts as well as difficult ones. Leith shares his contempt for salespeople who don\u2019t do a thorough job of touching base with all of their existing customers.<\/p>\n [\/et_pb_text][et_pb_testimonial author=”George Leith” job_title=”Former Chief Customer Officer” company_name=”Vendasta” quote_icon_background_color=”#3b9a62″ admin_label=”Testimonial – George Leith” _builder_version=”4.27.4″ _module_preset=”default” body_text_color=”#555555″ author_text_color=”#555555″ position_text_color=”#555555″ company_text_color=”#555555″ max_width=”95%” global_colors_info=”{}”]<\/p>\n \u201cIf you look at successful companies, at a high level they\u2019re talking about net dollar retention, but you don\u2019t manage a sales team on net dollar retention because it leads to unintended consequences. For example, if I have a book of 75 customers, I can hide the fact that I haven\u2019t contacted some of those customers with what I\u2019m bringing in from my high-growing clients. This is the classic 80\/20 rule, 80 percent of your business comes from 20 percent of your customers. By measuring or celebrating lagging metrics like net dollar retention, the day-to-day activities of that team can be masked. I could have one customer knock it out of the park and have 10 customers that I didn\u2019t spend any time with. So it comes back to business management 101, you have A accounts, B accounts, which you\u2019re working to make A accounts, and you have C accounts that you\u2019re really trying to figure out, but you have to touch them all.\u201d<\/em><\/p>\n [\/et_pb_testimonial][et_pb_text admin_label=”How to increase customer lifetime value with CLV marketing – Remaining Text” _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n Net dollar retention<\/a> is a metric that shows changes in recurring revenue such as churn, upgrades, and downgrades. As Leith describes it, net dollar retention is the destination, but as a sales leader, activity and contact metrics, as well as the amount of time spent with each account, should be your leading metrics.<\/p>\n No one likes to be passed off to the next customer service representative because what you need isn\u2019t technically \u201ctheir department\u201d. If customers are just handed-off after the deal is closed it\u2019s likely they will be dissatisfied with their experience. Many require frequent check-ins to ensure they aren\u2019t on the verge of churning due to pain points they\u2019re experiencing. Kalungi found that Software-as-a-Service (SaaS) companies that target small- to medium-sized businesses (SMBs), will commonly have a monthly churn rate between three percent and seven percent<\/a>. Overlooked customers will undoubtedly churn and switch to competitors who offer similar products and services. To mitigate this risk, there should be an overarching objective among all experts involved in the customer journey.<\/p>\n \u201cIf the onboarding team is not aligned with the promise that has been made by the rep that closed the deal, you\u2019re going to have big problems. You might spin a lot of cycles, you might have a very frustrated team on either side of that equation. You really need to go in as a team,\u201d says Leith, \u201cDepending on the complexity of your solution, it usually takes a village, meaning a team approach. You need to have a level of communication between all parties and a clearly defined cadence of how that team approaches the customer.\u201d<\/p>\n Think back to your most recent check-up at the dentist. Every step sets the stage for the next expert to enter. From the greeting to the cleaning, to the assessment, and payment, there is a congruent flow. You probably had a good experience, at least as good as a trip to the dentist can be because there was an expert at each step. These experts communicate information during the transition and ensure that you\u2019re comfortable before leaving you.<\/p>\n This is similar to many larger sales teams. There are the initial contact teams who drum up clients with cold-calls. Then you have a team who has done more research into your company. Once a sale is made there is usually an onboarding team who trains new clients and gets them comfortable with the software. Your team is winning when they\u2019re seeking to understand the customer and build that trust daily. The brand experience needs to mesh with the brand promise made during the acquisition. If the message is disjointed you\u2019ll experience churn, keep the message consistent based on the multi-team objective.<\/p>\n All clients appreciate and respond to personalization, including your B2B existing customers. The underlying idea of personalization in CLV marketing is that customers are more than just numbers\u2014they\u2019re unique individuals with distinct preferences and behaviors. As a result, they appreciate and respond positively to experiences that feel thoughtfully customized to their particular needs and desires, bolstering their affinity towards your agency as their go-to digital solutions partner.<\/p>\n Harnessing the power of personalization in CLV marketing to existing customers starts with effective data utilization. This includes using marketing management software<\/a> to collect, analyze, and act based on customer data, which can provide insights into their interests, buying behaviors, software usage patterns, and more. With this knowledge at hand, your marketing team can create finely tailored messages, personalized promotions, and bespoke experiences, all aimed at meeting the customer where they are and increasing the customer lifetime value of existing clients.<\/p>\n The real beauty of this personalized approach is its ripple effect. When customers feel truly valued\u2014when they feel that their unique needs are understood and met\u2014they are far more likely to remain loyal. This strengthened loyalty not only contributes to a higher customer lifetime value but also promotes customer advocacy and positive word-of-mouth, leading to a broader impact on your brand\u2019s growth trajectory without any investment in new client acquisition.<\/p>\n By investing in personalized CLV marketing, businesses can enhance customer satisfaction, foster lasting relationships, and ultimately learn how to increase sales with existing customers. It\u2019s a strategy that goes beyond short-term gains, instead laying the foundation for long-term, sustainable success.<\/p>\n Building on the value of existing customers is a critical facet of optimizing CLV, and two effective strategies to achieve this are upselling and cross-selling. Statistically, these existing clients are more likely to buy from you again, since they\u2019ve already demonstrated trust in your agency. That\u2019s why upselling (offering a higher-priced, premium version of a tool or service) and cross-selling (proposing related or complementary tools or services) can be one of the most effective CLV marketing techniques.<\/p>\n However, to increase sales with existing customers and retain their trust and loyalty, it\u2019s important to go beyond merely pushing more products or services on them. Upselling and cross-selling efforts shouldn\u2019t just<\/em> be augmenting your bottom line; instead, your suggestions should be rooted in trying to maximize customer satisfaction and for sustainable, mutually beneficial, and long-lasting relationships.<\/p>\n Any upsell or cross-sell CLV marketing proposition should genuinely add value to the customer\u2019s experience, fitting seamlessly into their requirements and contributing positively to their engagement with your agency.<\/p>\n To generate client growth with existing customers, try to regularly identify potential solutions in your portfolio that can address problems or pain points they face. This customer-centric demonstrates your agency\u2019s commitment to serving the customers better, showing that you\u2019re not merely interested in their marketing budget<\/a>, but genuinely invested in their satisfaction and success.<\/p>\n One of the most powerful marketing resources a business has is its base of satisfied customers. These happy customers not only contribute to your revenue but can also serve as compelling brand ambassadors. It\u2019s: people trust the word of their peers, their friends, and their colleagues more than any advertisement.<\/p>\n Implementing a structured customer advocacy program is a strategy that motivates your existing customers to become vocal proponents of your brand. This could be realized through a variety of methods. For instance, a well-structured referral program can incentivize customers to share your brand with their network. You can also encourage customers to leave reviews or participate in case studies to offer authentic, first-hand testimonies of their experiences.<\/p>\n The beauty of customer advocacy is twofold:<\/p>\nWhat is customer lifetime value?<\/h2>\n
How to increase customer lifetime value with CLV marketing<\/h2>\n
Rank existing customers<\/h3>\n
Introduce them to client growth experts<\/h3>\n
Invest in personalized CLV marketing<\/h3>\n
Thoughtfully upsell and cross-sell to existing clients<\/h3>\n
Encourage existing customer advocacy<\/h3>\n