All you need to know about CLV in your marketing plan

All you need to know about CLV in your marketing plan

We have all heard of CLV (Customer Lifetime Value). Well for those who haven’t heard of it let me save the day. CLV is a metric used to calculate how much your business can make over the lifetime of your potential customers. Unfortunately, most entrepreneurs don’t utilize the CLV well, just because they don’t know the gain they get from using CLV in their marketing plan.

Why should you use CLV in your eCommerce marketing plan?

CLV is an under-utilized, overlooked metric. I am sure that you know that repeat customers spend more than new customers. You also spend more bringing in a new customer than bringing in a repeat customer.

So what am I driving at? The more you enhance your CLV through your marketing, the more money you make and the less money you spend acquiring new customers.

This is why you need to use CLV in your eCommerce marketing plan. Your marketing should focus more on growing and retaining your current customer base instead of hiring new customers.

So how do you use CLV in your eCommerce marketing plan? First, you need to learn how to calculate your CLV.

There are different ways to calculate CLV; it depends on you and the formula you adopt. You can always calculate CLV using this method:


CLV= CV x T=AOV x F x T.

CLV= customer lifetime value

F= purchase frequency (total orders per customer/unique customers)

AOV= average order value (total revenue/total number of orders)

T= customer lifetime (this is the time before a customer churns)

CV= customer value (the purchase frequency and the average order value over a given period would give you the customer value of an average customer).

So now that we know how to calculate CLV let’s find out how to use CLV in eCommerce marketing plan.

  1. Group your customers into different categories. Before you start using the CLV to your advantage, you have to find out which of your customers are the most prominent. To do that, you need to group your customers into different categories based on previous sales.

All you want to do is pick out your best customers, so all you need to do is to make different categories based on how often your customer’s order or the amount they spend. After grouping each customer, you can know figure out your most valuable customers.

  1. Shift your marketing focus to your customers. Shifting your marketing focus on your customers doesn’t mean you should disturb them with ads now and then, it means that you should focus your money on engaging people who already have an interest in you. And how do you achieve all this?
  • SMS messages. SMS messages are an excellent way to bring your customer closer to you. Unlike emails and social Medias, there is every tendency that SMS messages are read within the first two-five minutes of being received, which is good for your business. SMS messages also give you the chance to know your valuable customers.
  • Social media. Social media is another great way to engage with your customers. Investing in social media is worthwhile; it gives you the chance to interact more with your old customers and also new ones.
  • Loyalty programs. Loyalty programs are excellent CLV marketing strategy. They can make customers return and spend more. A good example of using a loyalty program to boost CLV would be enticing them on earning points. They would be glad to come back and bring other customers.
  • Email is a very great tool in CLV marketing. Investing in email strategy is useful because your previous customers have more tendency of buying from you through the email.

CLV is an important metric if you want to make more money and spend less. As I said, it is easier for your repeat customers to spend more than your new customers. Once you have calculated your CLV, use those tips to use CLV in your eCommerce marketing plan.

Suggested topics:

Leave a Reply

Close Menu