No one has ever gotten rich off of one product.
Sure, maybe the guy who sold the pet rock really did make a million dollars. But “One Product” businesses don’t stick around very long.
You don’t get rich selling $0.99 apps (unless you’re the Flappy Birds guy). But Apple sold over $20 Billion worth of stuff from the App Store in 2015.
Companies like Apple and Amazon have created businesses where it is easy for their customers to spend more money. In fact, Apple is so good at it, that they had to give millions of dollars back and make buying more stuff harder.
The world’s biggest companies understand the benefits of increasing “Customer Lifetime Value”.
What Is Customer Lifetime Value?
For the uninitiated, Customer Lifetime Value (CLV) is the total sales you earn over the lifetime relationship with a customer. So let’s take two examples…
My CLV with In & Out Burger is about $10. Ate it once, never again. I’m sorry, I just don’t get the hype.
But my CLV with Amazon is probably north of $50,000, and growing.
We stock a lot of stuff for the SamCart kitchen on Subscribe & Save. My house is getting the 1-hour delivery soon, RIP my bank account.
And who has EVER gone to Amazon for 1 thing and not ending up buying 8 things? Those bastards get me every time with the “You Might Also Like…” section.
It’s so easy. Oh, you are buying a new tripod? Well here’s a camera bag, light stands, and a fisheye lens to boot. All of the sudden a simple $25 order is $300, because it’s easy to buy other stuff you need.
Big companies invest a lot of time and effort into making buying more stuff really, really easy. No one on the planet had the ability to “Use the card on file” before Amazon literally made it up. Now every site or app you touch saves your credit card for easy use later on.
And if you’re paying attention, big companies are investing ungodly sums of money into making paying for everything even easier. ApplePay is no longer just for the buying apps. You can use it in grocery stores, electronics, and most importantly…Chick-Fil-A.
The Importance Of Customer Lifetime Value
So here’s the lesson for all of us not running a Fortune 500 company…
What are you doing to increase your customer lifetime value? Are you doing anything to help your customers buy more stuff? Are you making it easy for customers to make repeat purchases?
If your LTV is higher than your competition’s, then you have the competitive advantage to dominate your marketplace.
Higher LTV means you can spend more to acquire a customer. Buy up more advertising space. Undercut the competition on price.
Same reason Gillette sends out free razors to guys on their 18th birthday. Sure, that razor probably costs them $10 or so. But do you think the LTV of locking in that person to buying Gillette products forever is worth it?
Ya, me too.
Ok, so that’s LTV. Increase your LTV, have a more profitable business. Simple as that.
Now, let’s dive in and take a look at the 7 bulletproof strategies for increasing your lifetime customer value.
1) Boost Initial Order Value with “Order Bumps”
Wether you’ve heard the term “Order Bump” before or not, I guarantee you know what this is.
An order bump is when you offer your customers complimentary products before they complete their order.
Ever bought something from Amazon? Then you’ve seen their “Recommended Products” section right before you complete your order. That is the Rolls Royce of order bumps.
When you throw a pack of gum into your cart at the grocery store while waiting in the checkout line, that’s an order bump.
When you’re having a terrible day and somehow end up at McDonald’s ordering a Filet ‘O Fish sandwich and the high school kid behind the counter asks, “Would you like fries with that?”…well that’s an order bump, too.
Add an order bump to your checkout pages, and start turning your $25 sales into $50 sales.
Boom, life hack.
[Side Note] I am going to turn the entire SamCart website into a Life Hack lifestyle blog. Thoughts?
2) “Pre-Upsell” Customers with Pricing Tiers
Ever been through a Car Wash and spent a few extra dollars to grab the “Super Ultra-Deluxe Premium Platinum Spin Wash”? After all, it’s only $2 extra, right?
My boy Rudy gets it. Although this image could trigger some migraines…
That’s the beauty of pricing tiers. It’s the Pareto Principle in action (aka “The 80/20 Rule”). 20% of your customers are ready to spend more money, you just have to give them the opportunity.
Allow your customers to “Upgrade” their product before placing an order. Think of any product that offers “Silver”, “Gold”, and “Platinum” levels. Anything like that falls under the category of “Pricing Tiers”.
Will everyone choose the “Platinum” package? Heck no. But it only takes a few people to choose a higher package to really see the difference in your bottom line.
Let’s take a look at our own example. We sell a product called “The One Page Funnel”. On the checkout page, you’ll notice we have 3 pricing tiers.
If all we offered was the Basic plan, we would make $20,000 for every 100 customers who buy.
But offering additional tiers has a big effect on our sales. For every 100 customers that buy this product, we collect $44,400 in sales.
Thinking about adding in a new pricing tier for your product yet?
3) Boost Long-Term Sales with Recurring Subscriptions
Price your products in a way that keeps money coming in every month. This is an easy one.
Remember that stuff I said about “One Product” businesses? Well, here’s the exception.
Netflix. You pay about $10/month, and get access to everything Netflix has to offer. It’s a wonderfully simple offer, and it is a single product.
As you know, this one product works pretty well. In Q1 of 2016, Netflix had 81.5 MILLION subscribers paying them each and every month. Subscription income is the cheat code of any one-product business.
And if you have a tool like SamCart, creating recurring income is simple and flexible.
Wether you want to charge every week, every month, every year, or anything in between, you can do it with SamCart quickly and easily.
Want to create free trials, paid trials, or even payment plans? SamCart has you covered. Create any sort of recurring product that you can dream up with SamCart’s simple settings.
Wether the price is cheap, like Netflix, or high-ticket, like your car insurance, reliable monthly income is a calling card for sustainable brands.
4) Drive “Post-Sale” Revenue with 1-Click Upsells
The “Mother Ship” for increasing Customer Lifetime Value. Offer additional products to your customers immediately after they place an order, and let them do it with a single click of the mouse.
Like how the App Store can run the card you have on file the moment you realize Angry Birds 14: Avian Zombies just hit the App Store. This takes some complicated tech work to do yourself, unless you’re using SamCart.
Now, when it comes to 1-Click Upsells, there are two groups of people. Those who are procrastinating, and those who believe offering more products to you customers won’t work.
To group #1: Get your butt in gear. There’s money to be made. SamCart users who use just a single 1-Click Upsell increase their average customer value by +78%.
To group #2: You know the old saying, “You never know until you ask?”. Or the famous Michael Scott quote…
Well you never know which of your customers are ready to spend more money unless you let them.
Let’s say you sell a $100 product, and get 100 customers. That’s $10,000 in sales, tops.
Now I’m selling the same $100 product, but I also offer a single 1-click upsell, priced at $250. I get the same 100 customers, but 10% of them also accept the upsell product (a good, not great, conversion rate).
That’s $10,000 in sales from my first product. And an additional $2,500 in sales from the upsell. Just like that, I have 25% more sales than you do.
And that’s just sales! My profits could be double, or even triple, what yours are.
If you’re struggling to scale a business, successfully use paid advertising, or trying to get an idea off the ground, 1-Click Upsells is the fastest route to getting it done.
And stay tuned, we will be diving even deeper into 1-Click Upsells in our next post. Already working on it.
5) Pitch Other Products Through Customer Email Follow-Up
Leverage email marketing to let customers know about other products you offer in the days/weeks/months after they place an order.
Nothing terribly special about this, but it shocks me how many people do this incorrectly. They make a sale and that’s it, their customers never hear from them again.
Write email follow-up campaigns that educate your audience about your other products, and give them a chance to buy. That’s it. Don’t overthink it.
And here’s how simple the process can be, if you’re using SamCart…
- Duplicate one of your products with a single click.
- Easily change the title and lower the price to create a special offer, just for your customers.
- Grab the link to your new checkout page, and put it into your customer follow-up sequence!
With SamCart, it’s as simple as that.
Because I don’t know about you, but when Lululemon sends me an email about new yoga pants, I’m on that in a heartbeat. Before I even know what happened, I’m wearing new yoga pants that fit like a glove, and Lululemon increased my value to their company with a single email.
Oh, and remember, something is better than nothing. Way too many people get caught up with questions like, “How long do I wait between emails?”, “How many emails should I send?”, “What do I talk about?”.
Something is better than nothing. Give your customers a shot to buy something else, you’ll do fine.
6) Run Periodic Special Offers
Create special discounts & promotions for your existing customers. Special coupon codes, discounts on other products, sales around different holidays, special offers on their birthday….I could keep going.
This one should be a no brainer, but again most people never think to do promotions. I feel like every time I turn on a television I am bombarded by stores having sales for seemingly random reasons…
- “Come on down to Old Navy’s 2nd Tuesday of the month sale week!”
- “It’s Steve the Auto Repair Guy’s half birthday, which means free oil changes at Tyson’s Lexus dealer!”
- “It’s been 109 years since Grover Cleveland left the white house?! Come on down to Lululemon and grab your official Grover Cleveland yoga mat!”
I think that last one was from a dream I had once.
But why do people make sales around every imaginable holiday?
Because it gives them an excuse to provide discounts, talk to their audience, and get people in the door. You business is no different.
Offer special coupons. Make an area of your site for customer-only discounts. Put products on sale for a few days. Whatever you decide, just do something. Don’t go months without giving your audience a reason to buy something.
7) Make Orders on Your Customer’s Behalf
Train your Golden Retriever to close high-ticket sales, re-fill a customers monthly order, and more with a single button inside of SamCart. Oh what…you’re not using SamCart? Well then I guess you can’t do this one.
Ok but seriously, there is a button in SamCart that will change your business. SamCart users know it as, “Add To Order”.
Check this out…
So you can go find any order, and charge that customer’s credit card (or PayPal account!) on file for an additional product. All with a few clicks and a dropdown menu.
So you can close sales of all shapes and sizes without needing your customers to re-enter their payment info.
That’s how you make purchasing additional products easy.
Next Step: Download Your Customer Lifetime Value Cheat Sheet
Keep these ideas at the top of mind by downloading my free Customer Lifetime Value Cheat Sheet now! Click below to grab your copy.
And stay tuned. In our next post (already writing it), we will dive deeper into the king of Customer Lifetime Value: 1-Click Upsells.
The SamCart database has some incredible stats to share, and we’ll be talking much more in depth about that real soon.
Thanks for reading! If you enjoyed this post, leave a comment down below, I’d love to hear from you.