Why CLTV Is Important For E-commerce Businesses And Tips To Boost It

Why CLTV Is Important For E-commerce Businesses

The phenomenon of online shopping is exploding like never before! From buying tea and gadgets to availing car repair and spa services – you can practically purchase anything and everything online. Nearly 42% of online shoppers are estimated to research online and buy online during the holiday season!

We don’t doubt this number since we mentioned earlier that the e-commerce industry has its hands full during the holidays to ensure the customers have the best shopping experience!

But there’s a flip side: 40% of shoppers consult three or more websites before purchasing. This clearly shows no shortage of online shopping portals selling the same products as your firm.

What’s even more interesting is that it highlights the fact that there are way too many e-commerce stores to shop from. Although it’s a good thing for a shopper to have plenty of options, it isn’t necessarily a positive sign for e-businesses struggling to stay afloat amidst the cutthroat competition.

Is your Business Expanding with the E-commerce Customer Segment Boom?

A research article by eMarketer mentioned that the biggest reasons for the growth of e-commerce firms are greater mobile and internet penetration, increasing competition in the industry, and expanding disposable incomes of the middle classes.

ecommerce market size

So ask yourself – Do you know your target customer base properly? Are your customers happy to come to your website to shop? Who are those people? Trust us – it pays to know who your best and most loyal customers are! If you know them inside-out, you can identify more people like them and engage with them.

Let’s understand Customer Lifetime Value (CLTV)

CLTV is the value of an average customer during their entire relationship with an e-commerce company. The amount of money made from a customer before switching to a competitor or stops using the product altogether.

Mathematically speaking, it is:

{Average order value} x {No. of repeat sales} x {Average retention time}

User habits are defined by how long and how frequently they use a product, resulting in a higher CLTV. Once the e-commerce business notices high-value customers, they can examine the customer behavior with the metric and then try to replicate the positive experience customers have had because of other brands.

Customer Lifetime Value, or CLTV, tells you how much a customer is worth to your brand and gives insights into their overall value. With CLTV, you’ll better understand how much you should be investing in customer retention in the future – and what is the profile of your ideal customer.

Why does Customer Lifetime Value matter to your E-commerce Business?

Customer Lifetime Value is a critical metric in determining the health of your business and whether or not you should focus on increasing customer acquisition through marketing efforts.

A healthy CLTV indicates that customers are worth their cost to acquire them, meaning it’s more profitable for you to invest in acquiring new customers than retaining ones who have already made purchases from your brand.

Here is how you can optimize and boost your CLTV.

Six handy tips to boost CLTV of your E-commerce Business

Knowing the types of customers who have your best interest at heart and engaging with them can help you determine where your company should invest for growth.

Here’s how to boost your CLTV metric:

1. Engage with Personalized Emails; Re-engage with Push

70% of customers still choose emails as a way to communicate with brands and businesses. When they believe they have been sent something of value, there’s an opportunity for effective push notification marketing.

With push notifications, you can assure the customers that they are in control and stop the flow of information whenever they wish. Companies like Wigzo offer tools powered by machine learning that help track your website visitors as well customer behavior.

This helps you understand what they are looking for, where they come from and what you can do to make their overall experience better. So use this data to personalize your emails while sending offers on products and your browser notifications when promoting a new product or offering a discount on one!

2. Deploy Omnichannel personalization for a better customer experience

Using behavioral automation ensured by Wigzo, it is possible to create rich consumer profiles covering every detail of their buying behavior and reach out to them through personalized emailers, browser, and mobile notifications – but tailored to the customer’s interests. The more a customer sees you carrying the same message across platforms, the more chances of them coming to you to shop.

3. Don’t Hesitate To Upsell


When the seller encourages the customer to spend more than they had initially planned, that type of sale is called an “upsell.” It is essential to segment the customers into groups based on their behavior and purchase history with the brand to drive conversions. Only then will it be possible to send targeted recommendations to catch their attention.

Wigzo, for instance, creates 360-degree profiles of your customers that help you understand them better and automate more contextual outreach messages.

A greater open engagement, click-through, and conversion rate – isn’t that exactly what your marketing strategy has been aiming at? Yes – because this is what will lead to a better CLTV!

4. Opt for Paid Search 

Yes – we agree advertising spends are involved, but if the paid search will fetch you possible results, execute it correctly. Did you know Facebook ad prices have increased by 247%? This shows that a lot of brands are testing the waters in ad spends.

Take your business to the next level with this action. If you are confused about setting up the budget, take baby steps. Spend small amounts of money and analyze the results – good or bad – you get. Run multiple ad variations to get a clear understanding of what your customer wants.

5. Target the Right Person at the Right Time via Product Recommendations


If you’re looking at delivering a personalized shopping experience, then product recommendations can fetch possible results. 53% of customers, in fact, like seeing products on the website that are commonly based on their browsing history.

70% of Amazon’s homepage is dedicated to product recommendations. If you are a first-time visitor on the website, you will find generic recommendations such as “What Other Customers Are Looking At Right Now” or any “Best Seller.” If you revisit it, you will find personalized recommendations on the homepage that are based on your previous visits’ browsing history.

6. Deploy Replenishment Campaigns

If your company sells consumable or replacement products, integrate a replenishment campaign into your marketing strategy. Because more repeat customers mean more predictable revenue and profit steadily coming in from them.

By using replenishing campaigns to drive more repeat purchases, you can turn new customers into lifelong shoppers. E.g., Your replenishment campaigns can include sending your customer’s personalized coupons that they can redeem on a date of their choice!

Your Turn to Maximize Your CLTV

Wigzo’s machine learning technology helps you understand the changing needs of these customers and optimize your marketing strategies accordingly. 

When you know what a customer is looking for, the recommendations you make become more relevant.

Take Wigzo for a free trial run to see how it can add massive value to your e-commerce growth!

Zaujan Baig

Zaujan Baig

Experienced digital marketer, currently working as an SEO specialist at Wigzo Technologies. In his free time, you can find him drawing cartoons.

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