If you’ve been struggling to grow your sales, then it’s about time that you learn how to increase customer value lifetime for your business.
Any company, big or small, wants to have an increase in sales, and no matter which angle you look, it isn’t always that easy.
Some marketers like to use different strategies through experimenting until they find the best one for them.
Over the past few years, funnels are one of the most common methods used by marketers since it really does the job.
The good thing about applying funnel strategy is that you can apply it anywhere since it has so many different types that always work.
And when it comes to making a good amount of sales, a cart funnel might just help increase customer value lifetime and that’s exactly what today’s article is all about.
But before we get to the good stuff, let’s talk about the concept of customer value lifetime before diving deep into how you can increase this value in your business.
What is Customer Lifetime Value?
Customer lifetime value is the measurement or the total worth of how a customer is valuable to a company.
CLV is calculated using this formula:
CLV= average value x number of times a customer buys a product x average length of the relationship of the customer with the company
The CLV is very important since it helps determine:
- How much a company will spend to acquire a customer
- Which are the top-performing products
- Which product or services are highly profitable
- What type of clients are willing to buy your products or services.
In general, it helps in the decision-making of the business.
What is Customer Value?
Customer value is what a customer determines how “worth it” any product or service is of a certain company.
This also means that it is the level of satisfaction of a customer with what your company has to offer.
It’s just like having a five to zero star rating on most eCommerce websites, but more on the marketing stuff.
What is customer lifetime revenue?
Customer lifetime revenue is the estimate of the total amount of money that a customer is willing to spend on your company or website.
It doesn’t incorporate gross profit contribution since it is only an estimate of all revenues within the customer lifetime.
What is Customer Acquisition Cost?
Customer Acquisition Cost is the amount of money that a company is willing to spend to get a new customer.
This is calculated by adding all the costs in marketing, advertising, personnel, etc, and dividing the total amount by the number of customers acquired.
How long is a customer worth keeping?
The average length of the relationship of the customer with the company varies but usually, it’s less than 3 years.
So how can you make sure that you can make the most out of your customer’s experience on your website?
This is exactly where cart funnels comes in.
What is a Cart Funnel?
A cart funnel is a strategy that is highly recommended for people who are selling physical products.
This type of funnel is very effective in increasing customer lifetime value since it has this unique way of guiding your prospects throughout the entire process.
It also has this amazing ability to encourage your customers to buy more products and eventually coming back for more.
How do Cart Funnels Increase Customer Value?
Cart funnels are made of 3 essential steps that are quite similar to book funnels except that you can add more.
Take note that in every sales funnel, the same hook-story-offer structure is always used but sometimes the story isn’t included.
This is the first page of your cart funnel where you present a potential customer with a demo video and an attractive headline.
Your headline has to be catchy and relevant to your offer so your prospect becomes more interesting once they’re hooked.
For example, your company sells ergonomic chairs, the headline of your sales page shouldn’t be “The Best Office Chairs that Will Change Your Life Forever”
Instead, it has to be a headline that tells about the offer itself like, “Affordable Ergonomic Chairs in Less Than a Thousand”
As you can see, you’re not hooking your prospects with a curious headline because you’re selling a physical product here.
Your sales page also needs to have a two-step order form by telling them about their information first before making them buy the product.
This is actually a very effective strategy since prospects are much more willing to proceed to check out after entering their details.
I guess you can say it’s all about psychology.
Since we’re applying the two-step order form strategy, the next page of your order form should also include a product selector.
When you include a product selector on your order form, this encourages them to get add-ons or getting a bundle instead
This is what increases the cart value, thus increasing customer lifetime revenue.
After they entered their contact and payment details on the sales page, this is where you can offer them more products.
For example, Customer 1 added a pack of Barbecue Marinade to their cart along with an add-on which is a tiny bottle of Liquid Smoke.
Your upsell page is where you will present them with another offer that may or not be the same product.
In this part of the funnel, Customer 1 will be presented with a Promo Bundle that includes 3 packs of Barbecue Marinade and a bottle of Liquid Smoke at a discount for a limited time.
Suppose the price of Barbecue Marinade is $3.59 and the Liquid Smoke is $4.65, total $8.24.
Now, the promo bundle costs $12 which saves them $3.42 rather than paying for 15.42.
This means that they only paid for 2 packs of Barbecue Marinade and got 1 for free, and more sales for you.
And since this is a cart funnel, you can also choose to add more upsells if you want to increase your customer’s cart value.
Thank You Page
This is the last part of the cart funnel where you thank your prospect for making a purchase.
Of course, it doesn’t stop there,
The thank-you page is also where you can present them with another offer that eventually guides them to another sales funnel.
Since our customer is interested on buying ingredients, we can present them with another offer like a BBQ Grill or anything similar to the products that were in their cart.
Do sales funnels really work?
One thing that makes sales funnels work is their ability to turn a prospect into a customer like magic.
This strategy is what most companies use for their website and have been very effective ever since.
Simply because in an eCommerce website, there are no salespeople (except live chat support) and that’s why sales funnels are applied to guide the potential customer throughout the buying process.
However, creating a sales funnel can be critical because even one tiny mistake can lead to more mistakes
A sales funnel automates everything inside your website and if something doesn’t work, then you can’t expect to get an increase in sales no matter how many people you acquire.
Just like in cart funnels, there are different pages with different purposes.
If you created a bundle offer for a lawn mowing kit for example, and the next page shows a glass cleaner, then that’s already a reason why people don’t proceed to checkout.
Although it’s just a very small problem, if you have like 10 people checking out the same product, then that’s already considered a huge loss.
How do you avoid cart abandonment?
No matter how good your product is, if you don’t know how to turn your traffic into customers, then it’s still nothing.
While there are hundreds of reasons why people abandon their carts, you must also make sure that you’re doing something about it.
Cart Abandonment is the percentage of visitors in an eCommerce website that don’t make a purchase after adding a product to their cart.
This is a very frustrating experience for companies since they make nothing after acquiring a customer.
Can you imagine how much money you spent to get a customer to visit your website and getting nothing out of it?
Sure, it’s normal and everyone has their reasons that’s why you need to do these things to avoid cart abandonment:
Have a clear Call to Action
Don’t just show them your products, guide them and make the next steps clear by telling them that their product is “Successfully Added to Cart”.
This gives them an idea that they are ready to make a purchase.
Show the Total Cost Always
You need to make sure that you’re always telling them the total and accurate value of their cart.
Avoid making the same mistakes the second time around by checking your website’s analytics to monitor your customers.
If you have a lead magnet on your sales page, you can always send them an email to remind them about the products that they left in their cart.
Faster Checkout Forms
Your checkout forms should always be fast enough to process transactions.
If you don’t want the customer to hit the close button, then you need to check your checkout forms from time to time
If you want to know more strategies that you can apply to your business, we highly recommend reading our DotCom Secrets Review by clicking here.