How a customer perks program affects LTV

Nov 29, 2023
How do you increase the lifetime value of your customers? Offer a reason for them to come back.

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 important, maximizing the value of existing ones is equally essential, to drive sustainable and more profitable growth.

One strategy that’s often overlooked? Launching a customer perks program

A perk center is a centralized location on your website where customers can access rewards and benefits. These rewards can be general lifestyle or can be tailored to fit each customer's specific needs and preferences, which creates a more engaging and rewarding user experience. By providing customers with a reason to return to your site, a perk center can increase site stickiness, which ultimately leads to increased LTV.

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 their lifetime value grows. 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.

About the author
Geo Yuhba
Affiliate industry expert for almost 2 decades, with a background in training, education, and mentoring. Striving to find efficiencies within the work environment is a personal goal. Encourage a fun and exciting workplace for my colleagues. Creator of several communication tools both internally and externally that have led to solid growth in my portfolios.
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