10+ Proven Tactics To Increase Customer Lifetime

In today's highly competitive business environment, retaining customers is more important than ever. By increasing customer lifetime value, businesses can not only improve customer loyalty, but also drive more revenue in the long run!

In this article, we will explore the concept of customer lifetime value and the top proven strategies that businesses can use to increase it. We will go through:

So let's dive in and discover how you can improve the value that your customers bring to your business over time!

What Is The Customer Lifetime Value?

Customer lifetime value (CLV) measures the total revenue you expect from a customer during your entire relationship. 

In simple terms, it shows how much each customer is worth to your business. For example, if a customer spends $2 a day at your lemonade stand, their CLV for a year would be $730. This metric helps you focus on retaining high-value customers and guides smart marketing decisions.By monitoring CLV, you not only gauge customer value but also improve your overall rate of return on marketing investments. Discover more about this critical metric in our article on rate of return.

How To Calculate Customer Lifetime Value?

You can calculate CLV using this formula:

While manual calculations work for small businesses, tools like TrueProfit automate this process. TrueProfit collects your customer data, tracks changes in real time, and factors in costs like shipping and marketing to give you accurate CLV insights. This helps you understand your Net Profit Margin and Cost per Order without the hassle.

10+ Proven Strategies to Increase Customer Lifetime Values

#1. Personalize the customer experience

In e-commerce, personalization means using data to deliver a customized shopping journey. Use customer purchase history, browsing patterns, and demographics to tailor emails, product recommendations, and special offers. 

Actionable Tips:

Example:

Amazon’s “Recommended for You” section is a prime example of personalization that increases repeat purchases and drives higher CLV.

This personalized approach has been a key driver of Amazon's success, with the company reporting that personalized recommendations account for up to 35% of its total sales.

#2. Leverage social proof

Social proof builds trust by showing potential customers that others have had a positive experience with your brand. This is particularly effective in e-commerce, where customers rely on reviews and ratings to make decisions.
Actionable Tips:

Example:
Airbnb uses guest reviews to build credibility, leading to higher booking rates and increased customer loyalty. On a smaller scale, businesses can ask satisfied customers to leave reviews or testimonials on their website or social media pages through review apps.

You can also feature positive reviews or customer stories in your marketing materials or on their product pages. Most businesses use a quick product reviews solution like Kudosi (formerly Ali Reviews).

#3. Offer exceptional customer service

Top-notch customer service is a critical differentiator in the competitive e-commerce space. Quick responses, hassle-free returns, and proactive support can transform one-time buyers into lifelong customers. Customer experience enhancement can increase your customer lifetime value.

Actionable Tips:

Example:
Zappos has built its reputation on exceptional service - free shipping, easy returns, and 24/7 support - which has led to high customer loyalty and increased CLV.

#4. Create loyalty programs

A well-structured loyalty program rewards customers for their repeat business, encouraging them to spend more over time. For e-commerce, these programs should be simple, transparent, and offer clear rewards. A proper loyalty program can be the leverage to lift up your customer retention and loyalty.

Actionable Tips:

Example:
Sephora’s Beauty Insider program is a standout, offering rewards that encourage repeat purchases and deeper engagement. This loyalty program has been a key driver of customer engagement and retention for Sephora, with the company reporting that its Beauty Insider members spend 2.5 times more than non-members.

#5. Upsell and cross-sell

Upselling (encouraging a customer to buy a higher-end product) and cross-selling (suggesting complementary products) can significantly increase the average order value. In e-commerce, these strategies can substantially raise your average order value, turning a single sale into multiple or higher-value transactions.

Actionable Tips:

Example:
McDonald’s upselling technique—offering “supersize” options—boosts the average order value, a tactic that can be mirrored in e-commerce by recommending premium versions of products.

#6. Focus on customer retention

Retaining customers is more cost-effective than acquiring new ones. In the competitive e-commerce landscape, focusing on customer retention helps build trust, enhances customer lifetime value, and stabilizes revenue streams.

A detailed customer profitability analysis can reveal which customers contribute the most to your bottom line. Learn how to optimize your strategy with our customer profitability analysis.

Actionable Tips:

Example:
Apple’s ecosystem encourages repeat purchases through integrated services like AppleCare, ensuring a high customer retention rate.

#7. Implement a referral program

Referral programs leverage word-of-mouth marketing by rewarding existing customers for bringing in new ones. When customers refer friends and family, it not only drives new business but also reinforces loyalty among your current customer base. A powerful referral program will boost your customer lifetime value to new heights with minimal marketing cost.

Actionable Tips:

Example:

Dropbox offers free storage space to customers who refer their friends and family to the platform. This referral program has helped Dropbox acquire millions of new users while also increasing the lifetime value of existing customers.

#8. Offer subscription services

Subscription services create a predictable, recurring revenue stream by providing products or services on a regular basis. Subscriptions are particularly effective for consumable or regularly needed products, as they simplify the purchasing process for the customer.

By providing subscriptions, you also increase your average order value. For more targeted strategies, check out our guide on boosting your ecommerce profit: 6 tactics to increase AOV.

Actionable Tips:

Example:
Dollar Shave Club’s subscription model delivers grooming products regularly, resulting in high customer loyalty and predictable revenue.

#9. Provide educational content

Educational content helps position your e-commerce brand as an industry expert, increasing customer trust and engagement. This content can answer common questions, offer tutorials, and provide product usage tips. Besides selling your products, consider giving your customers educational content that they love.

Actionable Tips:

Example:
HubSpot’s extensive library of educational content not only drives traffic but also increases customer engagement and lifetime value.

#10. Gamify the customer experience

Gamification involves using game-like elements (points, badges, leaderboards) to make the shopping experience more engaging. This strategy encourages repeat visits and rewards active participation.

Actionable Tips:

Example:
Starbucks’ loyalty program uses gamification to keep customers engaged, driving both repeat purchases and higher CLV.

#11. Build a community

Creating a community around your brand fosters loyalty and a sense of belonging. For e-commerce businesses, community building can lead to higher engagement, increased referrals, and a stronger brand identity.

Actionable Tips:

Example:
Lululemon builds a strong community through events like yoga classes and running clubs, which enhances customer loyalty and lifetime value.

Final thoughts

Increasing customer lifetime value is critical for the long-term success of your e-commerce business. By implementing these targeted tactics—tailored specifically for online brands and dropshippers—you can build stronger customer relationships, boost repeat sales, and drive sustainable growth. 

Unlock your store’s full potential by mastering your customer lifetime value with ease. Ditch the spreadsheets and embrace real-time insights with TrueProfit. Join thousands of Shopify merchants who are already boosting their net profit.

See what proper profit-tracking looks like at trueprofit.io

Harry Chu

Harry Chu – Founder of TrueProfit & eCommerce Profitability Expert Harry Chu is the Founder of TrueProfit, a net profit tracking solution designed to help Shopify merchants gain real-time insights into their actual profits. With 11+ years of experience in eCommerce and technology, his expertise in profit analytics, cost tracking, and data-driven decision-making has made him a trusted voice for thousands of Shopify merchants.