6 Tips for Increasing Ecommerce Customer Lifetime Value

Customer lifetime value (CLV or LTV) is a staggeringly important metric. 

If your online store is great at retaining customers, you’re reducing your dependence on acquiring new ones, which is normally an expensive and time-consuming task.

Repeat business also increases your profit margins since it costs you significantly less to sell to an existing customer than to a new one.

Most online retail experts, quite rightfully, place CLV amongst the industry’s most important metrics. Doing whatever you can to boost yours is critical if you want to be successful in a space as competitive as ecommerce.

In this article, we’ll take a look at six actionable tactics you can implement to increase your ecommerce store’s capacity for keeping customers coming back for more.

What Exactly Is CLV, and How Do You Calculate It?

CLV is the amount of revenue that you can expect to earn from every person your store does business with. It’s the monetary value that each customer is worth for you.

The more times a customer returns for repeat purchases, the better for your CLV. The longer a person stays your customer and the more money they spend per transaction, the higher your CLV will be.

Calculate your customer lifetime value using the following formula:

“Annual revenue per customer” x “Average customer relationship duration (in years)” “Cost of customer acquisition”

Tips for Boosting Your Store’s CLV

1. Prioritize Customer Service

If you want your customers to keep coming back for more, you need to give them exceptional service and support throughout their buying journey.

Every single step a customer takes with you needs to be as convenient as possible for them. They need to feel valued. That is, you need to show them that you truly value their time and their peace of mind. 

To do this, you need to understand every single point where a customer can make contact with your brand. You need to assess these contact points critically and implement improvements wherever possible.

When it comes to customer service and support, every single one of your operating procedures and policies needs to be pulled apart. While doing so, ask yourself: “If I were a customer, would I be irritated, satisfied, or delighted by this interaction?”

Never aim for anything less than blowing your customers away with thoughtfulness, efficiency, and willingness to resolve any problem that they’ve experienced.

One of the most important aspects of nailing customer support is to make it easy for customers to get in touch with you. Gili makes use of the ever-popular “Contact Us” page for this purpose. On it, they offer customers four different contact methods:

  • Telephone number
  • Social media links
  • Email address
  • HTML contact form

This page also includes a physical address for returns as well as a link to the site’s FAQ section.

Source: Gili

2. Harness the Power of Email Marketing

As most digital marketers will tell you, a nice, big list of active email addresses is a goldmine. 

Experienced marketers know that email marketing is a massively effective channel with an unmatched ROI

They also know that if the addresses in your list belong to existing customers, your campaigns have an even better chance of generating sales.

The reason for this is quite simple – you have data on your existing customers. You know, amongst other things, their name, age, gender, location, as well as the products they’ve already purchased.

Having this information makes it possible to send highly personalized recommendation emails that take these (and other) data points into consideration. 

For instance, if someone living in Seattle has purchased running shoes from your store, send them an email recommending a lightweight, waterproof running jacket during the region’s wet season.

Sephora shows us another way to leverage customer data in an email campaign. The online cosmetics retailer sends out a blast of back-in-stock mail to customers who viewed the product page of an item that wasn’t in stock at the time.

Source: Sleeknote

3. Enable Cross-Selling With a Large Inventory of Related Products

When building your brand’s inventory, always bear in mind how big a role cross-selling plays in increasing a customer’s lifetime value.

Enable loyal customers to show their appreciation by stocking items they’re likely to want. Rain Or Shine Golf categorizes its products intelligently in the site’s primary navigation bar, making it easy for shoppers to find items that complement the ones they already own.

Source: Rain or Shine Golf

Fantasy Jocks were smart enough to extend their primary offering (high-quality fantasy sports trophies) with peripheral, consumable products like draft board kits.

Source: FantasyJocks

By stocking products that complement each other, you’re also making it easier to show product recommendations via email and retargeting campaigns. Leveraging customer data to enable cross-selling won’t be possible if you stock a limited range of items.

4. Sell on Several Platforms

“Being ubiquitous” is a large part of keeping your customer base engaged with your brand. This applies not only to your brand’s messaging but also to points of sale.

When an existing customer comes across your brand on Facebook, Instagram, or Amazon and their interest is piqued by a particular product, don’t force them to navigate out of their current environment to trigger a sale.

Since most shoppers now kick their journey off at Amazon rather than Google, many brands find it essential to have a store on the world’s leading ecommerce platform. 

At the same time, social networks like Facebook and Instagram are also becoming popular shopping destinations for their billions of users.

Rebecca Minkoff takes full advantage of what the digital landscape offers online retailers. The designer handbag brand boosted its visibility – and the chances of repeat purchases – by having additional storefronts on Amazon, Instagram, and Facebook.

5. Offer Subscription Shopping

The relative security of recurring revenue is no longer something that only SaaS companies can benefit from. 

Over the past number of years, this payment model has become increasingly popular amongst online retailers that want more “reliable” relationships with their customers.

Getting people comfortable with a recurring payment depends heavily on making it worth their while. Committing to a monthly fee must offer a benefit that conventional commerce doesn’t.

Retail companies that have enjoyed success with the recurring payment model typically offer their customers one of the following two benefits:


Craft Gin Club offers its subscribers a hand-picked bottle of gin from one of the world’s best small-batch distillers.


Brands like Parasol and Farmhouse make restocking crucial household items easy and risk-free.

It’s not uncommon for online retailers to boost their CLV even more by incentivizing customers to pre-pay for longer subscription periods. Discounted rates, free shipping, and access to premium products are all fantastic motivations for a lengthier commitment.

6. Implement a Loyalty Program

The most old-school tip on our list, loyalty programs might seem a little dated but are still remarkably effective in the digital age.

In a survey published by eMarketer, global internet users’ feelings towards loyalty programs were made pretty clear. Earning some kind of reward for shopping at a specific store came in second as the most valued aspect of online shopping.

Further underscoring its relevance are Bain’s findings that loyalty programs actively influence the spending behavior of 66% of shoppers.

As you can imagine, with stats like these backing them up, there’s no shortage of excellent examples of online loyalty programs.

Blume’s Blumetopia is based on a point-scoring system that awards customers a predetermined amount of Blume Bucks for certain actions they take both on and off the site.

Source: Blume

By taking the “virtual currency” approach, Blume is able to stimulate a wide range of customer behaviors, and not only future purchases. By rewarding their customers with redeemable loyalty points, the retailer has also been able to boost their social media following and promote community engagement.

Sephora takes a slightly different approach to loyalty. Instead of allocating points for actions, the retailer places customers on one of three reward tiers based on the amount of money they spend at the store within a certain timeframe.

Once registered on the Beauty Insider program, Sephora customers enjoy a wide range of benefits like various types of discounts, free product samples, and access to exclusive events.

Some Final Thoughts

Don’t get preoccupied with growing your business with new customers. 

Sure, it’s a great feeling when new people see the value your store has to offer. Persuading someone you have no history with decides to become a customer.

But the meat and potatoes of ecommerce lie in convincing these people to keep coming back. Without a solid retention strategy, you’re making life extremely difficult for yourself.

So, implement as many of these tips as possible. Keep researching the topic and dedicate as much time as you can to building relationships with your customers. They deserve it, and so do you.

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John Hurley

John Hurley is a professional geek. He loves to nerd out on the latest technology and digital marketing trends. And he enjoys delivering amazing results to his mostly (SaaS & e-commerce) clients.