Why CLTV Is Important For eCommerce Businesses And Tips To Boost It

The phenomenon of online shopping is exploding like never before! From buying tea and gadgets to availing car repair and spa services – you can practically purchase anything and everything online. A 2016 infographic by Website Setup stated that 73% of online shoppers are estimated to shop with new online retailers during the holiday season!

We don’t doubt this number since we mentioned earlier that eCommerce industry has its hands full during the holidays to ensure the customers have the best shopping experience ever!

But there’s a flip side: 40% of shoppers consult 3 or more websites before making a purchase. This clearly shows that there’s no dearth of online shopping portals selling the same products as your own firm.

What’s even more interesting is that it highlights the fact that there are way too many eCommerce stores to shop from, and although it’s a good thing for a shopper to have plenty of options, it isn’t necessarily a positive sign for e-businesses who are struggling to stay afloat amidst the cut throat competition.

The eCommerce sector is exploding, but is your business?

A research article by eMarketer mentioned that the biggest reasons for the growth of eCommerce firms are greater mobile and internet penetration, increasing competition in the industry and expanding disposable incomes of middle classes.


So ask yourself – Do you know your target customer base properly? Are you customers happy to come to your website to shop? Who are those people? Trust us – it pays to know who your best and most loyal customers are! If you know them inside-out, you can identify more people like them and engage with them.


Let’s understand Customer Lifetime Value (CLTV)

CLTV is the value of an average customer during his or her entire relationship with an eCommerce company. It is the amount of money made from a customer before he or she switches to a competitor or stops using the product altogether.

Mathematically speaking, it is:

{Average order value} x {No. of repeat sales} x {Average retention time}


User habits are defined by how long and how frequently he or she uses a product which ultimately result in a higher CLTV. Once the eCommerce business notices high-value customers, they can examine the customer behaviour with the metric and then try to replicate the positive experience customers have had because of other brands.


In a nutshell, CLTV is important to calculate for every eCommerce business because it affects every aspect related to running a firm, and most importantly it gives the e-business an idea about how they can up the loyalty quotient of the now-gone customer. After all – who doesn’t want a lost customer back?!

Five handy tips to boost CLTV of your eCommerce business

Knowing the types of customers who have your best interest at heart and engaging with them can help you determine where your company should invest for growth.


Here’s how to boost your CLTV metric:

1. Engage with personalized emails; re-engage with push

70% of customers still choose emails as a way to communicate with brands and businesses. When they believe they have been sent something of value, there’s an opportunity for effective push notification marketing.

With push, you can assure the customers that they are in control and can stop the flow of information whenever they wish to. Companies like Wigzo offer tools powered by machine learning that help track your website visitors as well customer behaviour.

This helps you understand what they are looking for, where they come from and what you can do to make their overall experience better. So use this data to personalize your emails while sending offers on products and your browser notifications when promoting a new product or offering a discount on one!


Read more: Is Behavioural Automation The Only Way To Survive Digital Competition In 2017?

2. Apply omnichannel approach for a better customer experience

Using behavioural automation ensured by Wigzo, it is not only possible to create rich consumer profiles covering every detail of their buying behaviour but also reach out to them through personalized emailers, browser and mobile notifications – but tailored to the customer interests. The more a customer sees you carrying the same message across platforms, the more are the chances of him or her coming to you to shop.


Read more: The Movement From Single Channel To Omni Channel Marketing

3. Don’t hesitate to upsell

When the seller encourages the customer to spend more than he or she had originally planned to, that type of sale is called an “upsell”. To drive conversions, it is important to segment the customers into groups on the basis of their behaviour and purchase history with the brand. Only then will it be possible to send targeted recommendations to catch their attention.

Wigzo, for instance, creates 360 degree profiles of your customers that help you understand them better and automate more contextual outreach messages.

A greater open engagement, click through and conversion rate – isn’t that exactly what your marketing strategy has been aiming at? Yes – because this is what will lead to a better CLTV!

4. Opt for paid search please

Yes – we agree advertising spends are involved but if you do it the right way, paid search will fetch you viable results. Did you know Facebook ad prices have increased by 247%? This shows that a lot of brands are testing the waters in ad spends.

Take your business to the next level with this action. If you are confused about setting up the budget, take baby steps. Spend small amounts of money and analyze the results – good or bad – you get. Run multiple ad variations to get a clear understanding about what your customer wants.

5. Target the right person at the right time via product recommendations

If you’re looking at delivering a personalized shopping experience, then product recommendations can fetch viable results. 53% of customers, in fact, like seeing products on the website that are commonly based on their browsing history.

Amazing: 70% of Amazon’s homepage is dedicated to product recommendations. If you are a first-time visitor on the website, you will find generic recommendations such as “What Other Customers Are Looking At Right Now” or any “Best Seller”. If you visit it again, you will find personalized recommendations on the homepage that are based on your previous visits’ browsing history.


Wigzo’s machine learning technology helps you in understanding the changing needs of these customers and optimize your marketing strategies accordingly. When you know what a customer is looking for, the recommendations you make become more relevant to him or her.

Atyab Mohammad

Atyab Mohammad

Atyab is the Chief Product Officer at Wigzo. A Professional from IIT Delhi, India. He has worked for creating products for companies like Canon. You might find him singing loudly during late hours in his office, which he calls an "Idea Generation Catalyst".

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