6 Guaranteed Ways to Increase Your Customer Lifetime Value with Email Remarketing

Customer Lifetime Value (LTV) is one of the most important metrics when it comes to analyzing your online business. Sadly, it’s often overlooked!

As this great infographic from KISSmetrics shows, analytics software can help you calculate and monitor your average customer LTV.

Once you know your customer LTV figures, you should focus on how you can increase them. After all, increasing your average customer LTV means you’ll be making more money from your current customers. Who wouldn’t want that?

Today we’re going to discuss six email remarketing strategies that will give you practical examples you can use immediately to ensure your customers spend more and stick around longer.

1. Use product lifecycles to your advantage

Driving repeat sales is extremely difficult. It’s a key factor in determining the lifetime value of a customer. The more customers come back, the higher their LTV. You should plan your email remarketing campaigns using any and every opportunity to send smart emails that drive real sales.

A lot of the products we buy on a day-to-day basis are things we will buy again in a few weeks or months. Clothes, healthcare products, electronics, food, and stationary are all examples of this.

As a marketer, this is the sort of knowledge you can use to your advantage. Imagine you sell men’s collared work shirts online. Your analytics might tell you that of the customers who purchase shirts, two percent return six months later and purchase work shirts again.

This is a pattern you can act on. Set up a campaign that sends customers who purchase a work shirt today a replenishment email five and a half months from now. By enforcing the pattern, this campaign is a great way to drive that two percent much higher and get a repeat sale out of customers who would otherwise never return to your store.

The fact is that most customers will forget where they got their shirt (even if they’ve loved wearing it), pass another store on the way to work one day and duck in without giving you a thought, or they won’t even think to re-stock their wardrobe in the first place! A product lifecycle campaign can go a long way to combat these scenarios and is a no-brainer.

Take this example from Feel Good Contact Lenses. Contact lenses are the perfect example of a product that needs regular re-stocking:

contact lenses reminder email

On top of being great for repeat purchases and your customer LTV, product lifecycle campaigns are actually helpful. As a contact lens wearer myself, it’s handy to get a reminder – it sucks when one runs out of contacts!

2. Create a sense of urgency

Urgency is a huge psychological motivator. Look at Groupon: love or hate their business, you can’t argue with the fact that they grew and grew quickly. A big part of the success behind the daily deals concept is the urgency of the deals. The fact that they last only twenty-four hours greatly drives human impulse.

With this in mind, an email remarketing campaign that drives repeat sales with the help of urgency is a wish list sale campaign. Take this example from ModCloth:

Modcloth email

This might be as part of a site-wide sale or it might be a coupon code customized just for the customer. This is a great way to move stock or drive sales at any given time while bringing customers back to your store. As such, this campaign is a great way to re-activate customers who haven’t purchased in a while or to prompt a purchase from regular customers. It’s great all round!

A twist on this concept is to send customers a notification on items in their wish list that are about to run out of stock. Although this is driven by natural levels in your stock, it’s another opportunity you should not miss and a campaign you should set up today.

3. Ask them to pay more

If you have recurring revenue streams, a great way to increase the LTV of your customers is to get them to pay over a longer period. If most of your customers pay monthly, getting more to pay annually decreases churn and increases your average customer lifespan.

Email remarketing is the perfect channel for guiding users toward your annual plans as it’s cheap, it’s a trusted communication channel, and you can talk directly to customers when they are at the right point in your funnel.

The most well executed version of this campaign I’ve seen in action is from WP Engine, a premium WordPress hosting provider. They send out the following emails that offer loyal customers two months free if they upgrade to the annual plan today.

WP wngine email

Some customers were so impressed they blogged about it! This campaign does two things right that you can emulate:

  1. It makes it super easy to upgrade. One or two clicks is all it should take for your customer to act on any remarketing emails you send. WP Engine nails this.
  2. It offers an incentive to encourage even more users to take up the offer. Two months out of twelve sounds pretty good, right? For WP Engine it’s a good trade in order to keep users around for at least another twelve months and to get them to pay up front.

This campaign has the added bonus of providing your growing business with a cash flow boost; and, let’s face it, you should never say no to that!

4. Make them feel loved

Once in a while, you should simply show your customers that you care. Customers love it when you recognize them personally, and sometimes all you need to do is literally say thank you.

A great example from the masters of customer service, Zappos, is this email campaign:

zappos email

Occasionally, they email customers and let them know they have upgraded them to faster shipping. They still do this today, and it’s a brilliant strategy.

This campaign works because it builds long-term loyalty. Zappos does not compete on price. Instead they compete on service; and, with campaigns like this, it’s easy to see why they’re winning.

Set up your own automated email campaign that targets users who have bought from you more than once before. Say thanks and give them a special benefit. Suggestions that work well include a coupon, an offer of free shipping, a free upgrade on their next order, or a month free this year.

This sort of tactic will help make your customer service legendary – something to talk about – and it will keep your customers around for a lot longer.

5. Remind them why they need you!

Send customers regular emails telling them how much they need you.

This example from Brennan Dunn, the founder of Planscope, does a great job. The campaign goes out weekly to his customer base and is a reminder of the value Planscope is providing them – in real dollar terms.

planscope email

No matter what sort of business you have (paid, unpaid, etc.), setting up a campaign that goes out weekly or monthly with actual statistics on how your product has made your customers’ lives better increases the average lifespan of your customer base.

If I told you that you were paying me $50 a month to help generate your $500 extra per week, would you stick around?

Of course you would. Re-affirming value is a sure-fire strategy.

Here’s another example from Fitbit:

fitbit email

They don’t charge their customers, but they want to ensure customers keep using their app with a high level of engagement. In this weekly email, you can see that they draw attention to each metric that Fitbit helps you track and compares them to the previous week. This drives interaction and motivates customers to continue using the platform.

6. Segment your users to maximize profit

When calculating your LTV, an important factor is your profit margin. As a business owner, it’s common sense that you want to maximize the profit you make from any transaction and marketing effort.

As a savvy businessperson, you, no doubt, know that there are segments of your customer base that are far more valuable than others. Every business has a group of customers who are loyal, purchase regularly, spread the word, and even defend your company when necessary!

One thing that happens all too often is simply sending the same offer to your entire customer base. This leaves money on the table, plain and simple! Intermix, an online fashion retailer, broke down the offers in their lifecycle campaigns based on three key segments: VIP shoppers, sale shoppers, and brand shoppers.

intermix email

The most important distinction here is the difference between VIP shoppers and everyone else. Intermix found that by offering the VIP shoppers perks that were not monetary discounts, they were able to increase the profitability of their email remarketing campaigns by twenty-eight percent. Instead of giving them a coupon, they offered things like invitations to launch events or an early preview of a new line. Twenty-eight percent is a large increase, particularly for a store their size. This increase in profit margin has a dramatic impact on the LTV of a customer base.

Segment your own customer base using core attributes. Common attributes to consider include past purchase frequency, past purchase value, acquisition channel, location, and demographic data. Once you have determined three to five core groups of customers, test different offers against each group when sending your email remarketing campaigns, and optimize for both revenue and profit.

Conclusion

This post should have given you some inspiration for campaigns you can set up in your own online business.

Each strategy discussed here will have a direct impact on your average customer lifetime value, which means you will, ultimately, make more money.

So what are you waiting for? Get started today!

About the Author: Chris Hexton is a co-founder of email remarketing software Vero. He spends his days helping online businesses optimize their email remarketing and use it effectively to maximize their profit. You can catch him on Twitter via @chexton. He’d love to talk with you!

  1. Another powerful segmentation might be engagement with the emails you send e.g those who have opened or clicked in a particular time range.
    Good article :)

  2. Event- or expected event-driven emails (and campaigns) are the holy grail for customer retention! Marketers really need to make friends with the data miners in the company.

  3. “Make them feel loved”

    Many business owners underestimate the power of making your customers feel loved. People go out of their way to do business with people who make them feel loved. And when things go wrong (like they do sometimes), they’ll cut you some slack. All things being equal, a customer will stick with a business that makes them feel loved or special.

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