All About CLTV
Don’t know what CLTV is? Don’t sweat it! Although, it’s something that, if calculated and improved, can be the secret sauce behind your business. That’s why we’re giving you a slice of marketing knowledge and letting you know the importance – and ins and outs – of customer life time value.
What is CLTV?
Customer Life Time Value (CLTV) has been called the “most important metric for your business”, so it’s a pretty big piece of the marketing pie. Although many businesses end up forgetting or under-valuing this metric, it can drive your most strategic campaigns and a ton of dough for your shop. Simply put, CLTV is the money a customer will bring to your pizza shop throughout their time as a lover of your pizza. It’s the measurement of that customer’s value to your shop, showing how much they’re worth to your brand, and how much time, money, and effort you’ll need to invest to keep them. Repeat buyers with loyalty to your shop and your pizza offerings have high CLTV. Customers with low CLTV take more energy and effort to acquire as a repeat customer, and are passive buyers with little to no knowledge or loyalty to your shop and brand. “Measuring feedback at all key touchpoints” can give you a good understanding of the “key drivers of CLV.”
How is CLTV Measured?
Not a math whiz? No worries. The CLTV “equation” isn’t as difficult as it sounds. With just a few key ingredients, you can get a clear understanding of your current CLTV, and create the perfect recipe to improve that number. CLTV is calculated by taking the average purchase value, multiplied by the purchase frequency, multiplied by the average customer lifetime. If you’d like the equation minced down a bit further, check out HubSpot’s Customer Lifetime Value Model.
How Can I Improve My CLTV?
Now that you know what CLTV is, let’s start improving it. Here’s a list of ingredients to consider when trying to boost your shop’s CLTV number…
- Make first impressions a top priority. Ensure that your people and your marketing materials are communicating in a personalized manner, and that you’re showcasing your product from the get-go.
- Give your customers valuable content. Don’t just bombard their mailboxes with impersonal messaging that’s clearly aimed to solely sell them pizza. Send messaging that shows the value of your product, highlights offers and promotions, and again, is personalized.
- Always work on improving your customer service. “Data reveals that one-third of customers are likely to switch brands after a single instance of poor customer service.” Don’t let that happen. Ensure that your employees are trained, available and quick to respond, and have excellent knowledge of your pizza, how it’s made, and its history.
- Have relationships with your customers, and listen to them. Contact them, survey, them, and stay aware of their wants and needs.
- Find out what customers are loving – whether that be offers, menu items, delivery services – and give them what they’re looking for.
- Personalization. We know we’ve repeated this several times now, but it’s so important. Make your customers feel special by implementing personalization whenever and wherever you can in your messaging. Meet them where they are in their pizza journey – whether that’s looking for a quick slice or on a search for their go-to shop.
- Track your marketing and sales processes to make sure you are properly engaging customers at the right times and frequencies.
- Upsell your customers when it’s appropriate and makes sense for them. If done correctly, it can increase revenue for you, but come off as a perk to ongoing customers.
- Don’t be afraid to increase pricing, but give existing and long-time customers discounts and special offers so that they know you value them.
Let’s Dive In
Interested in diving deeper into the deep dish of CLTV possibilities? ZaHub is Pizza Marketing, Made Simple, and we know best when it comes to acquiring, increasing and retaining your customers, whether their interested in your pizza for life or just a slice. Contact us today.