Optimize Customer Lifetime Value (CLV) - Your Easiest Path to Increased Sales

No matter your preferred marketing channels, one truth remains universal: attracting new customers is more expensive than retaining them.

Therefore, if you face lackluster sales, the short-term solution may not lie in building brand awareness or attracting new visitors, but rather in increasing customer retention and average purchase value. All these metrics contribute to the all-important customer lifetime value (CLV).

There are many tactics marketers can rely upon to optimize a customer’s lifetime value. However, no CLV improvement strategy is ever simple—brands must better understand their customers’ unique needs, put forth a measurement plan, and choose the tactics that will yield the greatest improvements.

Consider Whether a Poor CLV is a Symptom of a Greater Problem

A lack of returning customers usually signals a subpar product or experience. You may have some ideas as to why—if you run a quick-service restaurant, perhaps wait times for food are longer than customers would like, or high staff turnover leads to trainees consistently disappointing patrons. If you operate a service-based business like a fitness gym, a competitor down the road may offer lower rates, or your aging equipment might fail to keep users enticed.

Our point? There are countless reasons your CLV may be slipping, and it’s up to you to uncover the truth and assess the ROI of course-correcting. Ways you can gather intel include:

• Customer surveys
• Social listening
• Competitive research
• Observing sales interactions
• Monitoring customer complaints
• Consulting with customer service teams

Identify and Cater to Core Audiences

Naturally, some customers will be one-time purchasers, regardless of the experience you provide. Perhaps they are buying a gift for a relative or are a tourist visiting only for a short time. While their business is important, regardless, these are not the audiences that will significantly improve your CLV. With this in mind:

Identify your ideal customer(s) - What are their age ranges? Income brackets? Preferred media consumption? Core beliefs and priorities? These are all questions you should be able to answer. If you haven’t already, it’s time to build your marketing personas.

Craft every stage of the user journey with these audiences in mind - From marketing to designing the in-store experience to optimizing customer support, every decision should align with the values of your core customers. While there’s a risk of alienating outside audiences, remember that not all customers provide equal value or warrant the same level of priority.

To see this principle in action, let’s compare to fitness gym chains, Equinox and Planet Fitness. Every aspect of Equinox—from its marketing to its decor—deliberately caters to high-income adults who prioritize peak physical performance; the brand exudes sexiness and coolness, distancing itself from being family-friendly or inclusive. n contrast, Planet Fitness embraces a more inclusive approach, with taglines like “best value on the planet” and “a place where everyone feels welcome.”

Now, imagine if either gym tried to retain its current members while simultaneously recruiting the other’s audience—it would have to compromise its brand and user experience, ultimately appealing to no one.

Educate Customers About Your Products and Services

One reason customers may fail to fully appreciate your goods is a lack of education or misaligned expectations.

Returning to the example of a quick-service restaurant that takes too long to prepare meals—upgrading equipment to speed up service might be one solution, but another could be reframing the wait as a trade-off for higher quality. If you use words like freshly made throughout your marketing, patrons may not mind the longer wait times.

In short, educating customers is arguably the most budget-friendly tactic to improve retention and customer lifetime value. Tactics can include:

• Confirm that marketing accurately reflects your offerings - Customer education can start long before they step foot into your retail location or enlist your services. Not only can accurate representation ensure you attract the right audiences, but it can also manage expectations.
• Improve “how-to” instructional aids - If people can’t figure out your rowing machine’s cool new features or how to adjust a newly purchased dog harness, they’ll be underwhelmed or outright dejected. To prevent this, regularly gather feedback on the clarity of your instructional materials and ensure they’re easily accessible where they’re most needed. For instance, if customers find your dog harness difficult to use, consider including a printout with a QR code that links to a helpful demonstration video.
• Consider free workshops - What do REI, Home Depot, Lego, Sephora, and Apple all have in common? They all offer free in-store workshops. This not only creates opportunities to upsell customers—further increasing CLV—but also helps educate them on how to make the most of the products they already own for maximum satisfaction.
• Ensure top-down internal education - Let’s say you run a retail franchise—does your new holiday hire know how to highlight the quality stitching in your pants, or where to find answers if customers ask hard questions? It’s not only your responsibility to equip them with the proper onboarding but also to train management on how to train.

First-Rate Customer Support is Essential for CLV Improvements

What Customers Want From Customer Support

Dissatisfied customers will be less likely to return in the future. Worse, they can even proactively hurt your reputation through negative word-of-mouth, digital or otherwise. Therefore, a multi-pronged approach to customer support is crucial to increasing your average customer lifetime value. When seeking answers, customers want:

• Accessibility
• Convenience
• Transparency
• Personalized
• Mutual respect

For the best results, develop a strong customer service strategy using at least two or more of the following tools:

• AI-based two-way communication - As noted in SMS Customer Support - How to Do it Right, one of the primary upsides of using AI for customer service is its ability to provide 24/7 support at a fraction of the cost. Tools like Voxie use machine learning to help its AI understand the ins and outs of your business, while also harnessing Conversational Intelligence to accurately detect tone and subtle nuances—capabilities that were once beyond the reach of AI just a few years ago.

• A comprehensive online FAQ or knowledge base - Nowadays, when people struggle with using a complex product, many turn to the internet for guidance. Provide thorough yet clear explanations; more detailed ones may even deserve their own guide or video demonstration. To generate ideas for your how-to content, use SEO keyword tools to compile a list of terms people commonly search for related to your brand and products.
• Easy paths to connecting with a human - An increasing number of companies are intentionally placing barriers between their customers and support teams, directing them instead to automated solutions. While this approach is meant to prevent team overload and reduce costs, it can come at the expense of user satisfaction and, ultimately, customer lifetime value.

Invest in Post-Purchase Marketing

Beginning marketers may mistakenly think that the “funnel” or “journey” ends with a conversion, but pros know better—building brand loyalty and advocacy is the final goal that ultimately increases customer lifetime value. Therefore, continue to market to established buyers using known information to craft effective messaging.

Maintain Post-Purchase Communication

There’s no singular gamebook on how to best connect with current or past customers. Examples of post-purchase interactions that can improve CLV include:

• For expiring or regularly replaced items like cosmetics or running shoes, send an automated text with a re-up reminder and a discount
• Texting about early access to sales or new product launches
• Sending a birthday or anniversary text message with a special offer
• An email newsletter that shares a behind-the-scenes look at your business or process
• Offering a referral incentive for bringing in new customers
• Checking in after a set period to see if they need support

No matter how you market to existing customers, two universal principles always apply:

• Personalization and audience segmentation are crucial The benefit of marketing to individual customers rather than the masses is that you can leverage AI to tailor messaging as precisely as possible.
  Imagine you run a chain of bike shops and want to market to Casey, who just bought a child’s bike from your Phoenix location. Since Casey is likely a parent, you could automatically add him to an SMS group featuring future discounts on kids’ gear. The email newsletter he receives could be modified for Arizona customers, highlighting nearby trails and cross-promotions with local businesses.
  All such efforts to make your marketing outreach more relevant to Casey increase the likelihood of him engaging and eventually becoming a repeat customer. For more inspiration, read Personalized SMS Marketing – Maximizing its Potential in 2025.
• Test different approaches and channels to refine your strategies - The more campaigns you run, the more intel you’ll accumulate. If you take the time to track and analyze performance data, patterns should begin to emerge that illuminate your audiences’ unique preferences. Turn your observations into reality, and you can effectively optimize customer engagement and lifetime value.

Establish a Loyalty Program

A well-designed loyalty program encourages repeat purchases by rewarding customers for their continued business. More importantly, exclusive perks and incentives may help dissuade your most valuable customers from considering a competitor.

Identify Natural Upsell and Cross-Sale Opportunities

Improving a customer’s lifetime value boils down to two key strategies: increasing the number of transactions and boosting the value of each transaction. Upselling and cross-selling, of course, fall into the latter.

There are countless examples of companies successfully achieving these goals at scale, from fast food chains offering meal size upgrades to brands upselling product customizations like personalized engravings.

While we’re not here to give you a step-by-step guide on upselling and cross-selling, here are some strategies to help you strike gold:

• When cross-selling, examine purchase history to determine which products tend to go hand-in-hand - Some pairings may be obvious—such as puppy training pads and dog crates. However, data may reveal surprise combinations, granting deeper insights into your customers.
• Consider making discounted upgrades and bundles temporary to create a sense of urgency - We’re all familiar with the powerful phrase for a limited time only. A short window provides customers with extra motivation to take advantage of the deal. This approach is especially effective for moving aging inventory while keeping deals fresh and enticing.
• Promote new or temporary deals via SMS, email, and social - Does your coffee franchise now offer a half-off cookie with every large coffee? Let your followers know, and your shops may be top-of-mind next time they have a sweet tooth.
• Train staff specifically on how to cross-sell and when to back off - We’ve all had that uncomfortable experience with a pushy salesperson who refuses to accept “no” for an answer, leaving a bad impression. To avoid this, train your team on how to offer upgrades with finesse and recognize when to stop.

Nurture Community Bonds and Interpersonal Relationships

The foundation of brand loyalty consists of numerous building blocks, such as established familiarity, trust, and consistency. However, arguably the most powerful building block toward improving CLV is an emotional connection between the customer and the company.

While approaches to forging stronger community bonds are near infinite, ideas include:

• Localizing marketing messages, whether through SMS, social media, or in-store decor
• Spotlight your staff within your localized marketing to emphasize the humans behind the products
• Feature localized user-generated content on your social media to celebrate customers
• Contribute toward community events and charity drives
• Showcase local artists’ work within your locations
• Host in-store workshops that provided added value beyond your products
• Let customers feel a sense of ownership over your brand—perhaps it’s a contest for children to name the new ice cream flavor or to design a limited edition T-shirt you sell.
• Celebrate customers’ milestones by sending a special offer on birthdays or anniversaries with your brand

Use Customer Data to Improve the Overall Experience

This article purposefully provided tactics for CLV optimization that were broad and all-encompassing. But how do you craft a strategy that fulfills the unique needs of your brand? The answer lies within your data. Metrics that can inspire CLV improvement plans can be:

• Buying patterns - Data-backed hypotheses can lead to improved merchandising, from your choice of products to determining the pricing and the placement in the store.
• Behavioral patterns - When do customers most frequent your stores or site? Do they browse or enter with a predetermined purchase in mind? Such insights can lead to operations optimizations, such as changing opening hours or the layout of the store.
• Engagement with sales events and discount codes - Do BOGO offers drive more engagement than traditional discounts? What’s the optimal sale duration for customers to redeem their discount codes? The more data you gather to answer these questions, the better you can fine-tune your strategies to boost engagement and optimize CLV.
• Outreach campaign interactions - The success of a marketing campaign hinges on numerous factors, from the choice of channel to the messaging and visuals. Diversify your strategies to increase your understanding of what works best.

As previously noted, some customers will naturally have higher CLV than others. Therefore, when making decisions based on the above data, keep these particular groups in the forefront of your mind.

Bonus Tips for Increasing Customer Lifetime Value

• A no-show appointment can cut into your income or sour the customer relationship (especially if you penalize them to recoup losses). To improve both profitability and retention, read Reducing No-Show Rates - Strategies and Tools.
• Refreshing your product offerings naturally keeps your most loyal customers curious about your brand while presenting new opportunities for them to buy more with you.
• Make transactions as effortless as possible for your customers. This could mean offering online appointment scheduling instead of relying solely on phone calls, enabling one-click purchasing, or broadening the type of payment types you accept.
• Focus on long-term CLV gains over short-term wins. If a customer has a problem, you could either refuse a refund and risk losing them forever or invest in making it right, transforming frustration into loyalty.

How to Track CLV

Customer lifetime value is easier to pinpoint for eCommerce or service-oriented businesses like childcare or accountants. However, even retail stores and restaurants can make solid efforts to measure CLV improvements.

To calculate the average customer lifetime value, multiply the average purchase amount by the average number of transactions per customer within a set period, then by the average customer lifespan. For example, in a cleaning business, you might calculate:

• The average fee for cleaning a house is $200
• A customer has their house cleaned on average 24 times per year
• The average customer stays with the company for 3 years

Therefore, in this scenario, the average CLV is $200 x 24 x 3 to equal $14,400.

So, how can businesses that rely on in-person purchases predict the average customer lifespan? While it’s impossible to track every individual, you can use available data to make informed estimates. For example, integrating a customer relationship management (CRM) platform with your point-of-sale system allows you to track customers across multiple interactions, giving a sampling that can inform your predicted churn rate.

Improve Customer Engagement and Lifetime Value With the Help of Voxie AI

Your marketing and operational strategies are the primary drivers of CLV optimizations, but your tech stack is the engine that makes it all possible. From your CRM to your website platform, the tools you choose can either accelerate growth or hold you back.

Voxie is a text marketing platform that introduces purpose-driven AI to maximize the effectiveness and scalability of SMS management. While companies of all types can benefit from our SMS-focused capabilities, we designed our dashboard to meet the unique needs of multi-location and franchise businesses.

Platform features that can help improve CLV through strategic SMS deployment include:

• 2-Way Communication enhanced with Conversational Intelligence - With text being the preferred method of communication for younger generations (and an increasing number of older adults as well), Voxie enables your customers to find near-instant answers, 24/7. Yet two-way conversations will go beyond merely quoting answers from your knowledge base—our sophisticated AI can detect context and sentiment, as well as integrate with other systems to deliver personalized responses to improve the quality of customer support and overall CLV.

  ![AI capabilities can be utilized to drive 2-way communication.](https://res.cloudinary.com/dsztk6f59/image/upload/w_635,f_auto/v1742389827/blog/nested-1742389827676.png)
  

• Heightened personalization and automated group segmentation - Make your SMS communications stand out by increasing relevancy, ultimately boosting both customer satisfaction and related revenue.

• Multi-step drip campaigns - Multi-drip campaign automation enables you to send the right message at the right time based on the individual’s interactions with your brand.

• Digital tools to help grow SMS subscriber lists - Voxie can help grow your contact list with proven templates for pop-ups, landing pages, QR codes, and more.

• Reporting dashboards that are both comprehensive and easy to understand - We’ve designed our reporting dashboards to facilitate analysis, featuring an intuitive interface that allows team members to quickly assign value to data and create tactical, measurable strategies.

To learn more about how Voxie’s many features can improve customer engagement and lifetime value, schedule a demo with our team!