Customer lifetime value (LTV) represents the total revenue that a customer is expected to generate over the course of their relationship with a brand. While acquiring new customers is step number one, maximizing the value of existing ones is equally essential, to drive sustainable long-term growth.
Perks influence customer behavior
Perks programs tap into the psychology of customer behavior to encourage loyalty. Companies that help their customers save can see higher perceived value, more logins, engagement, and following through with conversions. Aggregating all these behaviors on a macro level could mean moving business metrics that are incredibly valuable for your company.
A well-designed perks program that delights users not only boosts engagement, but also loyalty and long-term value.
Here’s how
Encourage repeat purchases. The more frequently customers purchase, the faster you can grow lifetime value. Perks like free shipping, discounts and early access promotions incentivize repeat transactions.
Drive referrals. Referrals have substantially higher conversion rates and lifetime value. Perks that reward sharing and referrals – like referral promo codes, social bonuses and gift cards – leverage peer influence to acquire quality customers.
Increase order value. Perks can nudge customers to “level up” orders to unlock freebies. For example, a gift over $50 purchase threshold or adding specific items for a bundle discount. Bigger orders mean bigger lifetime spend.
Win back at-risk customers. Special perks can re-engage lapsed or at-risk customers before it’s too late. Targeted win-back offers bring wandering customers back into the fold.
Reward loyalty. Make loyal customers feel valued through VIP access, early previews, and exclusives. Perks make them feel like privileged insiders worthy of their continued loyalty.
Surprise and delight. Unexpected perks like anniversaries gifts or surprise upgrades delight customers and drive positive brand associations, keeping them coming back.
Align your perks to strategic engagement goals, from driving repeat purchases to referrals and retention. Plus, the act of redeeming perks increases contact with your brand, website, and other offerings – expanding opportunities for cross-sell.
With compelling incentives and VIP treatment, a perks program boosts perceived value, satisfaction, and emotional connection. And loyal, happy customers translate directly into higher lifetime value.
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