LTV is a great metric to track when your business needs to build a multi-year relationship with a customer.
Netflix and other streaming services are great examples of services that need to keep customers loyal and engaged. Therefore, investing in retention strategies is often even more beneficial than going after new customers.
This does not mean that we should stop acquiring new belarus phone number resource leads and investing in prospecting, but rather that there is a difference in the results of efforts and strategies. Data from the consulting firm Invesp further reinforces this difference:
acquiring a new customer can cost 5 times more than retaining an existing one;
increasing customer retention by 5% can increase profits by 25-95%;
The success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is 5-20%.
Next, check out what it is and strategies to increase your business's LTV!
What is LTV (Lifetime Value)?
The acronym LTV stands for Lifetime Value , which can be translated as Lifetime Value. In this case, it is a metric for predicting the profit that a customer generates while maintaining a relationship with a company.
In other words, we can also call it “ customer lifetime ”, as it measures how much revenue this consumer represents for the business during a given period.
By providing this estimate, Lifetime Value (LTV) helps you set marketing budgets, understand your business profile, identify new opportunities, and figure out how to improve the customer experience .
If a company can successfully predict LTV, it can make assertive decisions to retain more customers.
Changes to increase your LTV can be as simple as changing your billing cycle from monthly to annual, or as challenging as overhauling your entire customer support process.
Therefore, below we have listed 5 strategies to increase LTV (Lifetime Value) and generate more revenue from your existing customers!