Contributed post from Spently, an app that allows you to customize Shopify email notifications to match your brand.
Customer Lifetime Value (CLV) is a business metric that measures the total net profit a company makes for a given customer over time. The higher your CLV, the more profitable your business. Given how expensive acquiring customers can be, nailing this metric is critical.
In fact, a study by Harvard Business Review found that getting a new customer is about 5 to 25 times more expensive than retaining the ones you already have. That said—if a customer buys from your store only once, your return on ad spend won't increase over time.
So, how can you increase customer lifetime value (CLV)?
You can start with email marketing — and no, we’re not talking about newsletters or cold outreach. While it's harder to sell to a new customer as opposed to an existing customer, you can incentivize customers and improve your relationships with them through email.
How do you make more sales through email marketing? How can you convert customers into repeat buyers? Here's what you need to do:
Leverage Marketing with Post-Purchase Emails
Transactional emails like order confirmation notifications and shipping confirmation notifications have high open rates.
Order confirmation emails have an open rate of 70.9 percent, which is about four times more than the average email.
Not surprisingly, when people purchase a product, they want to know that the transaction went well and that their new product is on the way. This provides the perfect upsell opportunity by including product recommendations in your emails based on your customer's browsing behavior, purchase history, and so on.
For example, Heirlume reported a 3 percent increase in conversions once it added product recommendations on its emails.
The perfect time to send these emails is immediately after the customer made a purchase.
Here’s an example from Westridge:
Likewise, shipping confirmation emails provide you with another opportunity to promote your products or foster engagement. Often, consumers open them because they want to find out when their product will arrive.
Here's an example from Sephora:
In the image above, the email has links to the company's social media sites. Once customers’ follow their accounts, Sephora has another opportunity to foster engagement and cultivate deeper relationships with its customers.
Discounts and related promotions are great for incentivizing first-time customers to make a purchase. Give a 10 to 50 percent discount for a first or second purchase via email. It's a small price to pay, but it might be the nudge they need to jumpstart a long-term relationship with your business.
For example, CreativeLive sends coupons via email to encourage people to make a purchase:
One Step Further With Automated Follow-ups
Whether through a cart recovery email or a replenishment email, automated follow-ups are designed to nudge window shoppers to take the leap and make their first purchase, or incentivize existing customers to become repeat purchasers.1. Replenishment Emails
Replenishment emails remind customers to reorder items that they've purchased. They're designed to drive repeat purchases and are based on behavioral data.
Tea is one example. When a customer buys tea bags, note the amount they purchased and when they purchased it. Let's say they bought 30 tea bags. You can then send them a recurring email after one month to remind them to make another purchase.
Here’s an example of a replenishment email from Amazon:
This is one effective technique to maximize customer lifetime value through repeat purchases. You know when customers will need to buy the products again, so you remind them to re-order and make another purchase.2. Cart Recovery Emails
Baymard Institute reports that there’s a whopping 69 percent shopping cart abandonment rate in 2017. So if your copyright game isn’t that strong, you can always include discounts and promos within your abandoned checkout emails to incentivize sales.
Here’s an example from monte + coe:
3. Customer Feedback Email
As its name suggests, this asks users for feedback on an item they recently bought.
Here's an example from Sleefs:
Sleefs uses its feedback email to get reviews and encourage referrals in exchange for a freebie.
How to Create and Customize Shopify Notification Emails Easily?
Merchants realize that customers are more responsive to tailored experiences with information that is relevant to them, their browsing data, and interests. This level of customization is necessary to maximize customer lifetime value.
Coding with HTML can be an arduous process at times, so Spently created an email template builder that allows you to easily build and personalize your store emails, design automated follow-up sequences, and embed marketing components with simple drag-and-drop functionality.
The Starter plan gives you the tools to customize Shopify notification emails and add marketing components to help your business drive repeat purchases and increase customer lifetime value.