March 10, 2022

LTV a top priority as acquisition costs spike

Wooden circles with expressions

Customer acquisition costs are increasing worldwide across channels. In response, founders are prioritising retention and looking for ways to increase customer lifetime value (LTV). 

In this week’s eComm Edit, we deep-dive into this critical technique and offer thoughtful ideas to apply to your business. Like what you read? Sign up to receive our fortnightly eComm growth newsletter here.

Retention has overtaken acquisition as a top priority

Maybe the writing was always on the wall. Given the sheer volume of brands going online during the pandemic. 

Deep down we knew though reaching new customers is important, the rising competition for online attention has reinforced the value of keeping existing customers. 

But don’t take our word for it, dig into why customer retention and LTV is a top priority with this new article

Inspired? See how you can put this thinking into action with our top tactics today. (See below)👇

Apply these tactics today.

Here are our top takeouts to apply to your business. 

Lead with the sale of your hero product

Pay careful attention to your product line. Some products or collections will attract a higher cash multiplier customer, and some won’t. Which SKUs or set of SKUs provides the best experience with your brand? In this example, Bambu Earth found that their mini kit purchasers had a substantially higher lifetime value than those who bought single items.

Create post-purchase funnels

Create post-purchase funnels to guide shoppers naturally through upsells and cross-sells. Use an alternating mix of top and middle of funnel content to test the waters. Then, once you’ve triggered stronger and repeated interest in a particular area (which should happen sooner than the first time around), slowly move the customer-prospect into a dedicated bottom of funnel stream. Not too risky. But we gain some additional insights into what our customer-prospect might be interested in. Find out more about post-purchase funnels here.

Adopt a recurring revenue model

We all know the value of turning one-time customers into brand ambassadors. Chances are you have a brand loyalty program in the works. But with many eCommerce brands offering comparable discount codes, set your brand apart by offering fun and exciting memberships, rewards and subscription programmes. Once you have subscribers, retain them by streamlining the billing process, and creating subscription tiers at different price points to provide choice. 

Further reading: The six must-haves to achieve breakthrough growth in e-commerce D2C

Final thoughts: Get ahead of the curve with the right resources and investment in place to operate at scale. 

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