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13 Ways eCommerce stores can Increase Customer Lifetime Value

Preethy Ann Kochummen
Senior Director Marketing & PR
increase CLV for eCommerce stores
Tags :
5 min

For an eCommerce store, every customer is essential and returning customers are even more important. Repeat customers are often responsible for generating maximum profit in an eCommerce store and research suggests that returning customers spend 3x what new customers do.

Ecommerce challenges come down to knowing your most loyal, repeat customers and understanding how to efficiently acquire more of them. To increase loyal, repeat customers, we need to understand their Customer Lifetime Value (CLV). CLV depicts how best you’re resonating with your audience, how much your customers love your products or services, the right things you’re doing, and the pitfalls.

In this article, we will discuss the 13 best ways to increase  Customer Lifetime Value of your eCommerce store to generate more valuable customers.

What is Customer Lifetime Value (CLV)?

Customer lifetime value is the total revenue an eCommerce store earns from a customer over time. It includes all their orders and purchase history.

CLV can help you determine how much you should spend to acquire customers similar to your loyal customers. It enables you to understand the consumer behavior of your long-term customers, the types of deals and offers they wish for, and the kind of brand communication you should be producing.

What are the advantages of customer lifetime value (CLV)? 

CLV is the core of a financially stable eCommerce business that can grow sustainably. This is mainly because CLV is a long-term metric that repeats the benefits of better ROI. Let’s look into some more critical advantages of CLV:

  • CLV will demonstrate a better picture of financial return on your investments.
  • CLV encourages eCommerce owners to be better decision-makers by making them spend less time acquiring customers with a lower value.
  • CLV measures the financial impact of your marketing campaigns, initiatives, offers, deals, etc.
  •  This metric will help you manage customer relationships effectively, which leads to increased profitability.
  • CLV will help you bring a balance between short-term and long-term marketing goals

How do you calculate customer lifetime value (CLV)? 

Customer Lifetime Value can be calculated by multiplying a customers’ average customer value, and average customer lifespan.

 Calculation of Customer Lifetime Value 


13 Ways to Boost Customer Lifetime Value of an eCommerce Store

Every customer is unique. So to create a lifetime relationship with customers, you have to start engaging customers at the beginning of their journey. Here are some  proven methods to  improve the Customer Lifetime Value for eCommerce businesses:

Initiate well-planned loyalty programs

Customers are fond of feeling appreciated and will stick to you if you create a loyalty program that benefits your customer. 58.7% of internet users believe earning rewards and loyalty points is one of the most valued aspects of the shopping experience. 

Loyalty programs are a popular way to retain customers for the long term and encourage them to buy more from your eCommerce store. It enables them to shop more from your site and increases your sales cycle. The main motive is to reward customers every time they purchase to return, and sustain customer loyalty. Here are some easy tips to initiate loyalty programs:

Loyalty program by Beauty Insider


  • Offering exclusive deals to customers
  • Provide discount coupons which can be used in future for another purchase
  • Give exclusive lifetime membership cards with different payment options or EMI so that you can let the customers stay for a long period.
  • Present to them with cash-back offers in paytm or other apps.
  • Offering welcome gifts to the first-time shoppers.
  • Give reward points, which can be used for purchases
  • Provide referral and VIP programs to bring more customers.

Personalized up-sell and cross-sell recommendations

Customers always want to develop a personal relationship with the brands they like. Upselling and cross-selling are two effective ways to increase the amount of money your customers spend on your business. If you want to sell complementary products or services – upselling is one of the simplest ways to raise your CLV. 

Cross-selling with complementary products

Upselling is a personalization tactic to persuade customers which works better for customers who’ve already made a purchase. The probability of selling to an existing customer is 60% to 70%, compared to a 5% to 20% chance of selling to a new one. Cross-selling can help you generate an extra 10% or more revenue per month from your existing customers.

Offer personalized cross-sell or up-sell recommendations to customers according to their intent. Here are some innovative ways to provide personalized recommendations:

  • Upsell smart by narrowing choices
  • Provide product bundles to reduce decision complexity of customers
  • Always recommend complementary products
  • Upsell your most popular products and deals
  • Enable real time cross-sell and upsell personalized recommendations based on several parameters like shopping behavior, brand etc.

How to enable personalized recommendations? With a personalized product recommendation engine! 

Argoid can help you engage shoppers with personalized cross-sell and up-sell recommendations tailored to their shopping intent. This can lead to a hassle-free customer journey and help you create highly converting customers!

Begin a subscription service

“Subscription is a next-generation finance model, and businesses are taking advantage of it because the revenue generated  is radically better than the old model.'' says Mike Redbord, the Senior Vice President of Operations at SaaSWorks.

Subscription and sign up for customers


Customers want ease and comfort, for which a subscription model is  best. 15% of online shoppers have signed up for one or more subscription services to receive recurring products. For an eCommerce business, a subscription model can generate recurring revenue, and you can make more than you do in a one-time sale. 

For customers, subscriptions lower the entry cost of accessing various products, allowing customers to get more products over time without additional cost.

Overall, a subscription model helps turn one-time shoppers into repeat customers. It also provides predictable revenue and reduces customer acquisition costs. Let’s look at few tips on how to offer an ideal subscription model to your customers:

  • Your model and pricing should be tied to business goals.
  • Provide advanced payment and also auto-renewals options.
  • Offer a variety of options in your pricing system.
  • Ensure that the subscription model is accessible, convenient, and controllable.
  • Branding your new subscription service is mandatory.

Optimize your customer onboarding process

It’s very crucial to get the onboarding experience of customers right. A seamless onboarding process motivates customers to use your product and return, translating into higher CLV in the long run. Here are some easy hacks to optimize your onboarding process:

  • Making the process quick and fulfilling.
  • Update your website regularly, have an easy-to-use website that is mobile-optimized. 
  • Tutorial content, such as videos, how-to articles, can help.
  • Focus on your offers and deals right from the beginning. 
  • Have multiple payment gateways.

Smooth onboarding process by Slack


Add more user-generated content

84% of millennials agree that user-generated content impacts their purchase decisions. You can feature user-generated content to other customers, which boosts engagement and customer lifetime value. One of the top-most benefits of user-generated content is excellent social proof.  When you see content from real customers, it increases your credibility and helps create a long-term bond. Shoppers resonate mostly not with a brand but with a satisfied customer. A significant 70% of consumers will consider UGC reviews or ratings before making a purchasing decision.

Let’s look at some strategies to leverage UGC in order to increase your Customer Lifetime Value:

  • Post visual stories and social media posts on customer testimonials
  • Encourage people to write honest and authentic reviews about recent purchases
  • Use contest marketing to collect UGC content by asking participants to submit photos, videos, comments, and reviews.
  • Work with trustworthy influencers, advocates, and brand communities to interact, launch and promote products
  • Hashtags enhance your posts and UGC campaigns get discovered.
  • Encourage customers to share a behind the scenes look of them using your product or service. Social proofing really helps.

 User-generated content by shape fx


Listen to and act on customer feedback

There is no expert you can consider for customer experience other than your customer. It is ideal to pay attention to what they have to say, let it be a complaint or even a compliment. eCommerce owners can address complaints to ensure that potential problems are resolved. Here are the best ways on how to deal with customer feedback:

  • Ensure that you address customer issues in a manner that eliminates problems with all customers.
  • If customers are pleased with your work, never stop giving your best.
  • Always be prepared to act on and respond to customer feedback.
  • Keep a track of all the customer feedback across all communication channels.
  • Use social listening tools and monitor customers’ reviews, mentions, and comments on your communication platforms.

Customer feedback forms given to the customer



Targeted messaging

In eCommerce, targeting involves positioning a product for a group of similar people, for example people belonging to a specific demographic or a homogenous group. Sending your potential customers target messages via email marketing and other channels can help you build a bond with your customers.

There are various types of targeted messages and offers which you can implement. Here are a few:

  • Special offer on previously purchased products or related products
  • Birthdays
  • “Anniversary” with your store
  • Festival wishes and offers 
  • Customer referral opportunities
  • A new program, development, or promotion you’ve got going
  • Sending a thank-you note 
  • Encouraging messages for product reviews
  • Abandoned cart messages

Abandoned cart target messaging


If done right, targeted messaging engages your target audience. It also makes your business approach unique compared to your competitors.

Implement Value-Tier Segmentation 

There are different methods to segment your customers into meaningful groups. Segmenting customers based on value- tiers at once rather than separately can provide you with much more information. This method is much better than just looking at each characteristic individually. Value-tier customer segmentation helps you identify which customers VIPs are and which are of lower value. After separating your customers into different value tiers, you can see where the value comes from. With well-defined levels of customer value, you can mainly focus on converting customers from the present tier to a higher one.

With most business initiatives, the goals of customer segmentation will likely depend on your company’s stage, market conditions, etc. But there are relatively standard schemes that coincide with most needs-based or value-tier segmentation initiatives.

Here are seven standard segmentation schemes that could be applied to your business:

segmentation table

To create a customer segmentation strategy, determine your goals. Then segment customers into groups and target them based on the above characteristics. For the most effective results, you should analyze your marketing initiatives and align your messaging as you learn more about each segment.

Study your loyal customers

Identifying loyal customers is essential, and improving products and services according to customer intent can keep them coming. To establish your loyal customer behavior whenever they visit your online store, you need to collect customer behavior data. 

You analyze how much they spend and how often they visit the store. Also, loyalty programs can yield excellent results in customer behavior if executed well. Before you launch the following marketing and loyalty program, the customer data can help you understand potential customers and maintain them. Here are some ways you can use to study about your loyal customers:

  • Differentiate who your best and worst customers are.
  • Perform qualitative research to find more about customer needs and intent.
  • You can use the RFM model, RFM represents a segmentation strategy to  analyze and split customers into segments based on three schemes: Recency, Frequency, and Monetary Value.
  • You can also understand customers in depth by initiating loyalty programs and measuring the results.

 Customer purchase history


Educate your customers about the product

Not all customers know about all your products. If you are launching a new product, educate your customers about it. When your customers know more about the products, they will be more willing to buy and remain loyal to the brand.

Here are some more tips for educating your customers about your product:

  • Creating blogs on the website
  • Hosting online webinars
  • Simply explain product details with a user manual
  • Choose a unique approach for each market segment, maybe a virtual event, campaign, or podcast.

 Gamification process utilized by Gwynnie bee


Utilize the power of gamification

Most people, be it any age, love to play games. Primarily, Gen Z are addicted to gamified content which is visually appealing. Gaming taps into our competitive human nature and winning something makes customers feel good.

Gamification in eCommerce aims at making the shopping experience entertaining by adding games leading to your eCommerce app/website to bring about increased engagement.

When using a gamification strategy,  customers are given points and rewards for interacting with their brand on social media, reviewing their products, buying, etc.

There are many ways to create a gamified shopping experience for your customers, and over the years, brands have got really creative with their gamified marketing strategies. 

 Sephora, World’s No.1 cosmetics retailer makes use of quizzes to guide shoppers to the products best suited to their needs.

Quiz by Sephora


Gamification ideas for your eCommerce store :

  • You need not stick to games, but surveys like ‘Find out your type’ surveys which can help with product selection and promotion.
  • Wheel of games are very popular which you can direct to either the home page or on any other most frequented landing page which will increase the likelihood of engagement.
  • Referral programs are a great way to make sure that your customers are also your passionate brand enthusiasts. You could offer  badges to encourage customers to reach higher levels of referral milestones.
  • Leaderboards are an effective way to encourage friendly competition to increase referrals over time.
  • You can add quizzes to your website, where you can offer personalized product recommendations to customers.
  • Exciting games like Treasure Hunt also drive traffic and product discoverability.

Offer the best customer support

If you want to increase customer lifetime value, you must always give them the support they need. Once the customer builds trust, they will always want to come back and buy from your store.

56% of people worldwide have stopped doing business with a company because of a poor customer service experience. Most customers will stop buying from a firm if the customer support team does not convince them on the first encounter.

Here are some tips to improve your customer support and increase your customer lifetime value:

  • Ensure you have a customer care team that communicates clearly to your customers 
  • Pay attention to what the customer is saying so that you answer their questions correctly. 
  • Empathize with the customer so that they can communicate their issues freely with you. 
  • Use respectful and positive language when addressing your customers. 

Maintain a consumer advisory board 

A consumer advisory board (CAB) is a bunch of customers who come together to advise the business or the company executives. The committee guides the business on corporate strategies and enhances business to develop solutions.

Statistics show that B2B companies with practical and robust consumer advisory boards enjoy a 9% surge in new business. CAB members review products, provide recommendations, bring up issues to their attention.

Consumer advisory boards are valuable resources as you grow your business. They will help you make critical decisions to ensure your growth is aligned with customer expectations. They will also ensure your roadmap is aligned to deliver value to loyal customers. This way, you can improve your customers' lifetime.

Closing Thoughts 

Increasing the customer lifetime value can help your business in many ways. Cutting customer acquisition costs saves money on marketing and also reduces customer churn. Maintaining ideal customer lifetime value requires consistent nurturing and care. To get sustainable results in customer retention strategies,  focus more on finding new and unique ways to improve all aspects of your business. With the right tactics, you can positively impact your customer’s journey, realize higher sales and CLV.

Want to know how a personalized recommendation engine on your store can help you realize higher sales and better CLV? Talk to us!

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