Increasing customer retention depends mainly on understanding your customers. If you adapt to their purchasing habits, you will see a rise in overall Customer value. Customer engagement is a must in e-commerce. Just to refresh your memory by definition, Customer lifetime value is the metric that indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer’s revenue value, and compares that number to the company’s predicted customer lifespan.
Customer Lifetime Value also known as CLV can safely be called the most complete metric for analytics. New customer rates, costs per order, customer retention rates, conversion percentages and many more are important to your future revenue, but CLV combines all the important statistics of every individual customer.
It is simply the expected profit you get from each customer in your business. With proper calculations, you can easily grow your e-commerce business with this metric. You won’t be losing money, because you will know exactly how much you earn.
As you may guess, weaker client relationships equal fewer repeat sales. If you don’t have an engaged core of loyal customers, you are doomed to a low CLV.