If you’re watching your budget right now like many companies, then maximizing customer lifetime value (CLV) is an excellent strategy to employ. This approach focuses on retaining existing customers to maintain and grow revenue.
CLV is the average amount of revenue generated over the course of a customer’s entire relationship with your company. Maximizing this figure means retaining customers in the long term and growing the revenue generated from the relationship over time.
This strategy is a better choice during economically challenging times because it costs your company less to retain and grow existing customers than it does to attract and sell new customers. Not only is this a more cost-effective strategy, but your satisfied clients are also easier to sell and more likely to spend more money with you than new customers.
This is the case because they already realize your organization’s value.
But how do you go about maximizing CLV to maintain and grow revenue during an economically challenging time? Here are several ideas to get you started.
Proven Strategies for Maximizing Customer Lifetime Value
When it comes to the lifetime value of your customers, there are a variety of ways to retain and grow your existing customers, so they stay with you in the long term and increase how much they are spending with your business over time. Here are some proven methods to help accomplish this goal.
Focus on Ideal Customers
Start by ensuring your sales team is selling to your ideal customers. If your customers are a great match for your product or service, they are more likely to receive value from working with your company. When this occurs, these clients are achieving the goals they set when deciding to do business with your organization. These types of customers are easier to retain as long as they are satisfied and receiving value.
Prioritize High-Value Customers
On average, 76% of a B2B company’s annual revenue is generated by existing customers according to recent research. When you’re striving to maximize CLV, you need to focus on the top customers who are generating the lion’s share of your revenue. These are your key accounts.
Implementing a key account management program, or improving your existing one, is an effective strategy to protect and grow the revenue generated by these accounts. So, this is an excellent strategy for maximizing CLV.
Provide an Excellent Onboarding Experience
Your customers’ onboarding experiences are critical to the long-term success of their relationship with your company. A smooth handoff from Sales to Account Management shortens the time to value and creates a trusted bond between the customer and key account manager (KAM).
Then supporting your account managers with KAM-specific software, like Kapta, enables KAMs to approach onboarding more strategically. This platform automatically tracks activities and streamlines day-to-day minutia, so account managers have the bandwidth to become trusted advisors to new clients faster.
This gives KAMs the time to prepare a preliminary account plan based on insights shared by Sales during the handoff. Plus, account managers gain sufficient time to prepare for and engage with new clients in a more thoughtful initial voice of customer (VOC) conversation.
Gather Authentic Customer Feedback
After getting off to a great start with new customers, it’s essential to continually keep abreast of customer sentiment as the relationship matures and the marketplace evolves. Advance VOC practices like establishing a regular cadence of engaging with customers in thoughtful conversation around strategic topics is the best way to stay current as client goals and priorities change. Then learning how to react appropriately to various types of feedback to effectively navigate any situation successfully.
Cross- and Up-Sell
Account managers need selling skills to successfully boost the CLV of their accounts. Knowing the subtle nuances of cross- and up-selling within their existing accounts is essential to becoming a true trusted advisor to VIP clients.
Unlike business development, selling to current accounts is quite different. These sales require proper timing and a deep understanding of the client, their needs, goals, and priorities. Plus, it requires a well-established relationship. But, ultimately, expanding business within existing accounts is worth it and boosts retention in the long run as well.
Offer Premium Perks
Customer advisory boards (CABs) are mutually beneficial to C-level contacts in key accounts and executives in your own company. These regularly scheduled meetings are when your executive leaders meet with executive peers from selected key customer accounts. They are designed to help you better understand the business issues that are motivating your key customers’ buying decisions.
Customers see these as a desirable perk, giving them access to inside information, a group of like-minded executives, and greater alignment with you as their supplier. Plus, they are fun!
Key accounts participating in CABs often become loyal, long-term advocates of your brand and expand their relationship with your organization. This often makes it easier for account managers to attain trusted advisor status in these clients’ eyes.
Become Customer-Centric
Shift the focus across your business to customer-centricity. Being customer-centric means focusing primarily on what the customer wants to accomplish and figuring out how you can help fulfill their needs.
Although it’s common to start by looking at how customers can help you meet your goals and plans, it’s essential to shift your mindset to see things from the customer’s perspective.
Prioritizing what’s important to your customers over what’s in it for your company is ultimately a win-win. This approach creates better customer experiences and helps customers achieve their goals. Customers receive the value they anticipated from doing business with your organization and you enjoy better retention in the long term.
Maximize Your Customer Lifetime Value
Start increasing your CLV today by making sure your Sales team is selling to ideal customers that are most likely to benefit from your product or service. Then focus your retention efforts on the accounts that generate most of your annual revenue by creating or improving your key account management program.
Start customer relationships off on a positive note and set them up to receive value more quickly. Then ensure key account managers learn advanced VOC skills to keep current with evolving customer needs, goals, and priorities. This will facilitate cross- and up-sells within existing accounts when paired with essential account manager selling skills.
Offering VIP executives premium perks helps your businesses align and creates a deeper bond with these clients. Then boost customer experiences by becoming customer-centric. Prioritizing your clients’ needs and goals will increase retention and growth in the long term.
Seeking additional ways to increase retention and growth in key accounts? Register your account managers for KAMGenius.
