The customer lifetime value is the projected worth of a customer in contribution margin to your business over the length of the time they’ll remain your customer. Therefore, A high lifetime value relative to the cost of acquisition is always a good thing.

So when your unit economics is unfavourably skewed, or just needs tuning up for better cash flow, one of the ways to balance out unit economics is to increase the lifetime value of your customers. Consequently, you make them worth more to you without increasing your cost of acquisition.

The most obvious way to do that is via retention. Step up your retention game. If you are able to keep your customers  longer, they are able to buy from you for a long period of time and bring you more value.

Here are some things you can do to increase your customer’s lifetime value:

1. Have a subscription strategy

Selling outright to new customers is always fun, but what if you could get that customer to commit to a subscription package?

This means you’ve locked them into your service for a considerable period of time, depending on your subscription package.

A traditional fruit store sells to customers when they walk in the door. If your fruit on demand business can get a customer to subscribe to have a specific number of fruit boxes sent to them over a period of time , you would have successfully locked them into a deal that will keep them in business with you for longer than an over-the-counter customer.

2. Make your services personal

When we get emails addressing us by name, the manner with which we approach the email immediately changes favourably.

Also Read  A step-by-step guide to scaling your business to a new city

Even if the information contained ends up being of no consequence, we find we take the time to read through. We usually don’t have the same patience for emails that start off with a generic: “Hi”.

Personalised emails makes us feel that we are not being treated like just another number in a list of subscribers.

People like to be related to as individuals.

As far as your resources allow, make your service personalised to your individual customers. Extend the personalisation to your website. Configure your website to give users a personal experience based on their previous interactions with your website.

3. Have a ‘free returns’ policy

Having to pay for a return simply doesn’t get customers excited about buying from you again.

Although this move will increase your operational cost: extra man-hours and logistics, but doing it could turn your retention all the way up.

As long as returns are not unusable or non-resellable, pucker up and let them bring them in free of charge. It is this strategy that has allowed the online print shop, Printivo earn the trust of its customers in Nigeria.

The founder, Oluyomi Ojo,“We’ve added a trust layer. If for any reason you don’t like your order, Printivo is going to print another one. We are building trust in an organic way.”

That trust layer has paid off for Printivo which has grown 100 percent from quarter to quarter since it launched in 2014.

4. Don’t falter on delivery

A lot of retention has to do with trust. If your customers trust you, they will stay with you.

Also Read  How to scale a business: 10 best practices

One way to cement trust is to keep within delivery window. It’s even better if you beat customers’ expectations by delivering faster than expected.

On the days you falter, always keep the communication channel open. Tell customers you are running a little late. This lets them know they are valued; developing a mutual respect between you both in the process.

5. Reward loyal customers

Remember the 80/20 Pareto principle, 80 percent of your sales will come from 20 percent of your customers: your high-value customers.

An effective way to strengthen brand affinity is to reward those loyal customers: the 20%. An obvious way to do this is via freebies. Another is to give access to exclusive services or content.

Get creative on this one. The goal is to make your customer feel they’ve been good and that they’ve been recognised to be good.

6. Upgrade your customer service

Few things rile customers and make them churn more than a shoddy customer support department. Rude customer support staff. Unreplied emails. Unattended complaints. The combination of these and makes a good recipe for losing customers.

A study by Harris Interactive found that 56 percent of people would switch to another company if the alternative offered more options to connect with them. This underlies the need to make yourself reachable. Set up multichannel points of contact and respond quickly to enquiries.

7. Build long term relationships

We’ve heard different versions of this truism, “business is not about making sales, it’s about making customers”.

Also Read  Growth Hacking Tips For Every Founder

To focus on sales alone is to think extremely short-term. Focus on making friends and partners out of your customers and they are sure to stay with you for longer.

Be honest about the services you are providing. Share its strengths and be clear on its limitations. Don’t just see your customer as the king, see them as a friend.

8. Cross-sell and up-sell

The goal is to make your customers spend more over the same period of patronage. Cross sell by suggesting other products on your line-up that customers can buy to compliment the product they ordered.

Up-sell by suggesting a better version of the product they wanted to buy. Better version, on the surface, means a product with more bells and whistles. It also means one that is more expensive.

This is not geared at making your customer stay longer, but for them to spend more regardless of how long they stay. Splendid innit?


But hold on tiger! The temptation often is to get sleazy with upselling and cross-selling. Don’t fall for that. Always be open to them about their options. Making irrelevant suggestions and over-promising is sure to damage your relationship with the customer.


Starta is making it easier to build, discover and track high growth business opportunities in Africa. We believe that billion dollar companies will emerge out of Africa built by Africans. Our mission is to help entrepreneurs that will make this happen. Sign up to join.