How to Improve Lifetime Value (LTV)

Strategies to extend LTV

Lesson Details:
August 19, 2020

Video Transcription: In this video let's talk about my common tactics to extend the lifetime value of your customers this video is brought to you by Appy Pie’s Academy the first and foremost is it has to be the quality of your product and service because guess what if your product or service is not that good no one will come back it's really that simple and the better it is that more people will come back it's really that simple so a lot of people early on a lot of first-time entrepreneurs they focus on how do I promote on social media how do I promote on Facebook on Twitter on SEO how do I get more clients how do I run ads but the truth is focus more on quality and that will get more people coming back more people sensing that their they'll get a better service or product and they'll be buying more readily so the more you polish and perfect your product or service the more your your sales will just happen and repeat sales will happen and that will immediately have its directly correlated with your revenue so definitely want to focus on quality as one of your highest priorities after you've got that and it's a little hard to say you've got that because quality improvement is ongoing there's always something to improve so as long as you're always having an eye on improving quality then you're in an okay place for that and you can focus on tactics to improve the lifetime customer value subscriptions are the kind of first place to look because there's a little bit of a trick to subscriptions in the people who subscribe they sometimes stop using the service but they forgot to unsubscribe so they keep on paying and paying and paying even if they don't come I mean how many people have a gym membership that they haven't been to in a gym for months but they still have a gym membership and the gym just charges them every month so that's the little secret of subscriptions people sometimes just stay subscribed even if they stop using the service and of course it's easier to keep people retained because they don't have to do any more work the problem with subscription is that people know that they're not gonna keep using it and they'll know that they'll quit using so that deters them from subscribing because they know they're gonna be keep paying for something that they don't eventually want that much so the solution to subscriptions to ease the pity to ease the signup process is actually to create consumables consumables are things people don't have to subscribe to but they use them as though they are subscribed for example food is a fantastic example because they had literally people have to consume food every day and you just have to make sure that it's your food so things that can be used and then have to be bored again that's a fantastic thing because people don't have to sign up for that and so it's easy for people to just get one and get another get another get another it's not prohibitive like subscriptions can be sometimes another way to make a lot of money from a customer is simply not rely on the long term necessarily because in some businesses there is no long term for example in entrepreneurship most businesses fail so after a business fail you can't sell anything to that business so some business says you have to sell for a higher price up front and get your money upfront so high prices sometimes are the solution to make more money per customer of course the higher your price the less customers.

You'll get but it's a different story but if you can get away with charging a higher price that's a fantastic way to immediately increase lifetime value of a customer and if you want to if you're able to you can create a large kind of log off of products for example I like to give the example of your going to a store and you're buying yogurt and I like this example because this worked on me there's yogurt that I like and it's like there's a cherry flavor and a blueberry flavor and a pineapple flavor and a vanilla flavor and even a chocolate flavor and I really like the cherry flavor and then kept buying the cherry flavor but then I was always like oh my god I want to try that coffee flavor or I want to try the blueberry flavor and so them having a large catalogue of different flavors and products helped me to spend more money with them because not only was I buying the cherry one that I like but then I was buying the blueberry and coffee one and it's the same you see with everything else almost every you know there's different varieties different types of all kinds of products and because they're just having a large catalog even if you look at my books I have 20 different books just so that people can a person who likes one can buy a lot more many mores many more books so large catalog is another thing to do a large catalog is a hard thing to do because it you actually have to come up with many prices but if it makes sense for your situation you should definitely have that so that you can present items to customers you know once they buy one you can present more for them to buy and that's a fantastic time also to sell them more is because they're very excited when they buy something they're very excited that at that moment and that's a fantastic time to offer them more items to buy and sometimes you'll see that people will buy multiple during one purchase after just starting with one item they're like well I want that one and that one's just like my example of the yogurt you know I want the cherry and the blueberry and and the other flavor another flavor and by day by day at the time you know it.

I'm leaving the store with seven different yogurts so that's what you have to do to create life improve your lifetime earnings from each customer these are not mutually exclusive you can for different situations you can use different ones and combinations of different ones the more the better and especially when you're business planning that is the ideal time to ask yourself hey is my business or product a kind of a long-term product because again a customer who stays with you for the long term you'll earn thousands or tens of thousands percent more from them so of course you want to conceptualize your business strategy in a way so that you'll be able to retain them longer they'll get more use out of you for a longer time and then they'll spend way more money with you or they'll just buy more money more with you upfront whether it's throw a large catalog or higher prices and ideally of course a large catalog and higher prices and over time so these are the all the ways that you can extend how much you earn from each customer.

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