How to Increase Customer LTV (Lifetime Value)

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Content
Calculation of the LTV (Lifetime Value) indicator
Increasing the average bill
Increasing the frequency of purchases
Increasing the average customer life cycle
General recommendations
LTV (lifetime value) is the total profit that a consumer telegram database search brings to a company over the entire period of cooperation with it. The higher this indicator, the more effective the advertising, and the more profitable the business as a whole. How to increase this indicator? To answer this question, we talked to experts and learned proven ways to increase the lifetime value of each client.

Calculation of the LTV (Lifetime Value) indicator
LTV is one of the most important business metrics. Business is on the rise if LTV exceeds the cost of attracting a new customer (CAC).

How to calculate this indicator?


Natalia Semagina, Marketing Director EMAILMATRIX

The basic formula for calculating LTV:
LTV = m * a * t, where
m is the average check in the reporting period;
a is the number of purchases in the reporting period;
t is the average lifetime in the metric of the reporting period.

For example, we have a client with an average check of 500 rubles. He makes a purchase once a month and is active for 7 months. His LTV will be 500 * 1 * 7 = 3500 rubles.

To increase LTV, Natalia Semagina recommends working with each of the three parameters: average check, number of purchases, lifetime.

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Increasing the average bill
Incentive promotions
To increase the average bill, launch incentive promotions - give gifts or bonuses for purchases exceeding a certain threshold.

Natalia Semagina, Marketing Director EMAILMATRIX

Calculating the minimum "size" of such a threshold is simple: determine the average customer check and increase the resulting figure by 1.1-1.5 times. This will give you the check size for which you will give a gift. Gifts should be significant for the client, and their value should be directly proportional to the client's check - the larger the amount in it, the more expensive the reward should be.

Use cross-selling and upselling technologies
Until the customer pays for the product, he is ready for an additional small but useful expense. If you have an online store, add a section "Related products" to the cart. A registered user can be sent a newsletter with recommendations based on his purchases.