16 Proven Ways to Increase Customer Lifetime Value (2025)

Discover 16 proven tactics to increase customer lifetime value and make more sales from your existing customers.

Prioritizing existing customers is a smart move, especially during a potential economic downturn. When you give them an excellent experience, they buy more from you and recommend their friends do the same. 

That’s why Antavo found that 67.7% of companies plan to increase their investment in customer retention throughout 2023. 

Ahead, you’ll learn proven tactics to increase customer lifetime value and make more sales from your existing customers. 

What is customer lifetime value (CLV)?

CLV is an estimate of how much revenue you’ll make over your entire relationship with a customer. It’s one of the most important metrics of a retail and ecommerce business. 

Imagine you own a fashion brand. A customer makes their first purchase of $200 from your online store. If they only make this single purchase, their customer value is relatively low. 

However, say this same customer likes your product and buys an additional $200 worth of merchandise every three months for the next five years. This means the customer’s lifetime value is $200 x 4 (times per year) x 5 (years) = $4,000—far more valuable than a one-off purchase.

Why is CLV important to your business growth?

CLV measures how much economic value a customer brings over their entire relationship with your business. You can use it to guide marketing strategies, budget allocations, and customer service policies.

Some benefits include:

• Predictability: CLV gives businesses a long-term view of customer relationships, which can be useful in predicting future revenue. That’s why in response to the recent economic circumstances, 67% of brands shifted their focus from acquisition to retention, Twilio
  reports.
• Customer retention and profitability: Repeat customers buy more from a company over time. Long-term customers also refer others to your business, which adds even more value to the relationship. 
• Smarter resource allocation: Knowing CLV helps you identify more profitable customer segments, so you can create more targeted marketing campaigns and attract higher-value customers. 
• Better customer experience: When a company focuses on CLV, it tends to provide better customer service—and when customers feel like you understand them, 82.5% are inclined to buy from you again. 

In an uncertain financial climate , customer retention should be your number one priority. Let’s look at where you should invest to increase customer satisfaction and CLV.

How to increase customer lifetime value

1. Calculate customer acquisition costs
2. Calculate customer lifetime value
3. Listen to customer feedback
4. Provide exceptional customer support
5. Personalize marketing efforts based on customer data
6. Implement loyalty programs to incentivize repeat purchases
7. Upsell and cross-sell relevant products or services
8. Build strong customer relationships
9. Segment your customer lifetime values
10. Focus on customer retention and reducing churn
11. Create tailored product recommendations
12. Customize marketing messages
13. Optimized pricing strategies
14. Tap into predictive analytics
15. Set up subscriptions and replenishment reminders
16. Create exclusivity and community

1. Calculate customer acquisition cost

Customer acquisition cost (CAC) is a key business metric that represents the cost of acquiring a new customer. It includes all marketing and sales costs spent to attract and convert a lead into a customer.

You can calculate CAC by dividing the total costs associated with acquisition by the total number of new customers within a specific time period.

Here’s the formula:

CAC = (MC + SC + W + OS) / CA

Where:

• MC is marketing costs
• SC is sales costs
• W is wages for marketing and sales teams
• OS is the overhead costs for marketing and sales
• CA is the number of new customers acquired

Monitor this metric regularly to measure the effectiveness of your marketing efforts and understand your return on investment. Lowering your CAC can increase CLV simultaneously. 

2. Calculate customer lifetime value

Customer lifetime value can be calculated using the following formula:

CLV = (Average Purchase Value x Purchase Frequency) x Average Customer Lifespan

To break it down:

• Average Purchase Value = Total Revenue / Number of Purchases
• Purchase Frequency = Number of Purchases / Number of Unique Customers
• Customer Value = Average Purchase Value x Purchase Frequency
• Average Customer Lifespan = Average number of years a customer continues purchasing from your business

3. Listen to customer feedback

Customer feedback gives you insight into what people think about your brand and its products. Listening to feedback helps you get to know your customers at their core, which most customers feel influences theirpurchasing decisions. 

When you use a Shopify app like POWR or Grapevine Surveys to create a feedback system on your website, customers can easily share their experiences and recommendations, and you get access to a goldmine of information for improving your products and CLV.

4. Provide exceptional customer support

Customer support helps customers out when something goes wrong, but it’s an area of business normally associated with slow response times and inefficiency. Today, customer support needs to be amazing if you want to retain customers and encourage sales. 

A unified commerce approach turns customer support from a reactive function into a tool for building customer relationships and driving loyalty. By consolidating first-party customer data across all touchpoints into a single customer model, you give your support team insights that enable truly personalized service interactions.

With access to rich customer data, support teams can:

• View complete purchase history across online and in-store transactions
• See customer segment information and preferences
• Access previous support interactions and their outcomes
• Understand the customer's lifetime value and engagement level
• Review specific product interactions and abandoned carts

Research what channels your customers prefer for support. Do they prefer self-service, social media, or website live chat? Once you know which channels to focus on, you can invest in them and provide better support. 

Shopify Inbox is a free Shopify app that helps retailers provide omnichannel support for customers. You can communicate and sell over online store chat, social media, and email, all from the app. You can even send products, discounts, and new orders from your Shopify store directly into the chats with just a few taps, to turn mere conversations into checkouts.

Shopify Inbox also connects with popular messaging platforms like Facebook Messenger, so customers can contact you directly from your Facebook page, Facebook shop, and Messenger.

5. Personalize marketing efforts based on customer data

Understanding individual preferences leads to personalized experiences that drive repeat sales. It requires knowing how a customer likes to shop, what products they’re interested in, and types of communications they prefer. 

But what do these personalized experiences look like? A recent Yotpo survey found what personalization actually looks like to customers. The top five responses were:

• The brand recommends products based on my previous purchases (53.9%).
• The brand emails me when products I’m interested in are back in stock (45.2%).
• The brand uses my name in emails and texts (37.7%).
• The brand knows my sizes, dietary restrictions, skin type, etc. (36.7%).
• The brand knows which loyalty tier I’m in and treats me accordingly (32.8%).

Understand your customers across all touchpoints, and avoid generic approaches to your marketing and communication through the customer journey. Don’t just send out a generic happy birthday email once a year—tailor your message and offers to your customer’s known tastes, needs, and style. Try an app like Rebuy Personalization Engine or Zepto Product Personalizer to tap into customer information and deliver the personalization they want.

6. Implement loyalty programs to incentivize repeat purchases

Customer loyalty programs are good for everyone.

One report found that 80% of companies who implemented a loyalty program reported a positive ROI, with an average of 4.9 times more revenue than expenses. Plus, 89% of customers trust loyalty programs to help them overcome the inflation crisis and potential recession. 

Use a loyalty program to show your most dedicated customers that you care by offering them gifts and rewards for repeat purchases. You can offer different perks to encourage upsells and cross-sells like:

• Points
• Gift cards
• Discounts
• Cash back
• Free swag

For example, body care retailer Blume used a point system called Blume Bucks (BBs) for their loyalty program, Blumetopia. Customers earn BBs by completing tasks like following the brand on Instagram, buying products, leaving a review, or having a birthday.

Earning Blume Bucks is easy. Get them whenever you shop. Plus, earn bonus BBs for fun things like being our friend on social, telling friends about Blume, and having a birthday (achievable, right?)."

It’s free to join, and customers can redeem BBs for free products, merch, and other gifts from Blume. 

Starting your loyalty program is easy. With an app like Smile, you can set up a program that gives your customers access to exclusive perks and discounts, referral and VIP programs, and other fun ways to engage with your brand when they log in to your store. 

Learn more by reading Keep Them Coming Back: 7 Innovative Customer Loyalty Programs (And How to Start Yours). 

7. Upsell and cross-sell relevant products or services

Upselling is a tactic in which you persuade customers to buy a premium or upgraded version of a purchased item, or other items. The recommended items are often more expensive, as the goal is to make a larger sale. It’s used with customers who’ve already made a purchase. 

With cross-selling, you make a recommendation of a product that complements the original product the customer purchased. Think of cross-selling as a server asking, “Would you like fries with that?” and upselling as, “Would you like Hendrick’s instead of well gin?”

Use an app like ReConvert to add upselling and cross-selling tactics to your store. It provides post-purchase funnels and one-click upsell pages you can design in minutes. You can also use it to display product recommendations, offer coupon codes, collect birthdays, and much more.

8. Build strong customer relationships 

Customer expectations are increasing. In 2022, Intercom found that 83% of support teams have experienced this increase, and say that they are doing more with less. 

Some easy ways to build strong customer relationships are:

• Sending personalized messages on special occasions, like a birthday 
• Providing omnichannel customer support
• Acting on customer feedback 
• Creating a community on social media or hosting events 

Personalization is the key competitive differentiator when building relationships and winning customers. Support teams that focused on personalized support reported doubling their customer retention, according to the Intercom report.

Take luxury floral brand Venus et Fleur: By implementing a unified commerce approach that connected their online and in-store experiences, they achieved a 10%-15% year-over-year increase in average order value over three years, and saw 15% higher order values from Shop app customers compared to shoppers on their website.

This approach to customer relationships led to improved loyalty metrics and a 12% reduction in abandoned carts, through personalized features like custom delivery calendars. The secret was making sure every customer touchpoint was connected and personalized to maintain a consistent experience across all channels.

Integrating Shopify POS into our existing commerce infrastructure, including our OMS and ERP system, was a seamless process. Shopify's robust API and extensive documentation facilitated smooth connections, allowing us to synchronize inventory, orders, and customer data across all platforms efficiently.

Brendan Gorman — Head of Ecommerce, Venus et Fleur

👉 Read Venus et Fleur’s story

9. Segment your customer lifetime values

Break customer groups into different groups based on profitability. For example, after tracking CLV over a period of time, you may find three segments: 

• High CLV: Loyal customers who frequently make large purchases and recommend your products to others
• Medium CLV: Customers who make regular, but smaller purchases
• Low CLV: Customers who make occasional small purchases and have a low repeat-purchase rate

Segmenting your CLV into these groups helps you focus your marketing efforts. For example, you can allocate more ad spend to customers in your high-CLV segment and reserve less expensive channels for mid-low-CLV customers.

10. Focus on customer retention and reducing churn

Customer retention refers to the actions you take to reduce customer churn. Churn rate, or customer attrition, is how many of your customers stop doing business with you during a defined period of time. Churn rates should be low, and high churn rates could indicate dissatisfaction.

Consider a subscription-based ecommerce business. Over time, the business notices that some customers stop their subscriptions after the first month. There is a high churn rate here.

Data and feedback may reveal that customers leave because they find the product too expensive or that it doesn’t meet their needs. As a result, the company can take specific measures to improve the product, offer customized solutions, or adjust pricing to improve customer retention.

11. Create tailored product recommendations

Tailored product recommendations use past purchases, browsing behaviors, and wish lists to show customers suggestions that resonate with their interests. They turn a genetic shopping experience into a curated journey, encouraging customers to engage with your brand repeatedly. 

One approach is through personalized storefronts. Having a customer sign in to their account when browsing can give you access to first-party data you can use to provide product recommendations.

For example, say a customer purchases yoga leggings. A personalized storefront might highlight matching sports bras, yoga mats, and wellness items they’ve browsed before. Integrating these tailored recommendations creates an intuitive shopping experience, as though the store anticipates their needs.

Personalized storefronts, supported by tools like Shopify’s segmentation features, enable on-the-fly updates based on real-time customer activity. Under a unified customer data model, you can highlight these recommendations not just on storefront pages, but also in emails, push notifications, in-store interactions, and account dashboards. 

12. Customize marketing messages

Segment customers into targeted groups and send messages that speak directly to their needs. Use Shopify’s unified customer model to consolidate purchase history, browsing behavior, and other interactions. Create segments such as:

• Frequent buyers: Customers who make purchases monthly
• Seasonal shoppers: Customers who buy primarily during holiday seasons
• Dormant customers: Customers who haven’t purchased in six months

Then, create campaigns for each segment:

• For frequent buyers, send an exclusive “VIP Early Access” email to preview new arrivals.
• For seasonal shoppers, send a reminder email about upcoming holiday promotions with suggestions for early shopping.
• For dormant customers, run a “We Miss You” campaign offering a personalized discount or free shipping to encourage a return purchase.

💡 Tip: Track campaign performance using Shopify Analytics to refine your messages. A/B test subject lines, offers, or imagery to see what resonates best and adjust your strategy accordingly.

13. Optimized pricing strategies

Building on Shopify's unified customer data model, retailers can develop nuanced pricing strategies based on comprehensive customer insights:

1. Customer purchase history across all channels (online and POS)
2. Segment-specific buying patterns
3. Customer interaction data from storefronts and marketing campaigns
4. Geographic and market-specific purchasing behaviors

Say an athletics wear retailer operates online and physical stores across multiple regions. After looking at their customer data, they notice customers who first purchase running shoes in-store are 40% more likely to buy premium gear online within the next 30 days.

Using this insight, the retailer implements a dynamic pricing strategy that automatically offers a 15% discount on performance wear items over $150 to customers who have purchased running shoes in-store within the past month. The retailer refines this strategy by adjusting the discount percentage based on geographic data, offering higher discounts in growth markets and lower discounts in regions with strong brand loyalty.

You can manage pricing for different markets using the Shopify API:

• Activate dynamic tax-inclusive pricing to adjust prices based on the customer’s location. 
• Set fixed prices by country or region using the PriceList API. 
• Automatically set price adjustments for specific marketing under the Markets setting. 

💡 Tip: Consider creating bundled offers that include running shoes and premium gear at a discounted rate. This can encourage customers to purchase both items together and increase your average order value.

14. Tap into predictive analytics

Use first-party data to get a glimpse into your customers’ future, so that you can understand and influence the customer journey. Retailers see an average 9% revenue increase when using Shopify POS for unified commerce.

Unlike other solutions that stitch together separate systems, Shopify POS is built directly into the same platform as your online store, which means all your customer, product, and order data flows through one system.

This unified approach allows you to see every customer interaction, whether they bought in-store or online, in a single customer profile, making it simpler to understand and serve your customers better.

For example, with unified data, you can:

• Project future purchase patterns and category expansion
• Identify high-potential customers early in their journey
• Predict optimal timing for cross-sell and upsell opportunities
• Calculate expected lifetime value trajectories
• Map customer evolution across segments

Imagine a beauty retailer notices customers who buy its skincare starter kit follow a specific journey:

• They start with the kit, then within three months, 60% expand into premium individual products.
• Within six months, 40% begin exploring the anti-aging line.

The data also shows that customers are unlikely to return if they don't make a second purchase within the first two months.

With these insights, a retailer could:

1. Send targeted educational content about premium products at the six-week mark
2. Time anti-aging product recommendations to match typical customer interest patterns
3. Offer skincare consultations during the critical six-week retention window
4. Concentrate marketing spend on the first 45 days of customer relationships
5. Structure loyalty rewards to match each phase of the customer journey

A forward-looking approach like this helps the retailer shape the customer journey, improve customer satisfaction, and increase CLV. 

15. Set up subscriptions and replenishment reminders

Subscriptions and replenishment reminders provide consistent revenue through automated recurring orders based on purchasing patterns. Under a single customer data model, it’s easy to track and analyze buying frequency. 

Use that data to:

• Set up flexible subscription plans that customers can self-manage
• Send timely replenishment reminders based on typical usage patterns
• Create personalized reorder prompts for frequently purchased items
• Use purchase history to suggest optimal replenishment timing

The Shopify Subscriptions app integrates with your store admin, so you can create and manage subscription programs without any third-party platforms. 

You can offer multiple subscription plans with flexible frequencies and discount types. At the same time, customers can easily manage their subscriptions through their account portal, including the ability to pause, skip, or cancel at any time. 

With built-in analytics and secure payment processing handled by Shopify, the app provides everything needed to launch and scale a successful subscription business.

16. Create exclusivity and community

Build customer profiles that identify your most engaged customers across all channels. This data helps you create precise segments for high-value customers who you can give exclusive offers and experiences.

Using Shopify Flow triggers and conditions, you can set up targeted communications that make customers feel valued, such as custom VIP discounts, special self-serve functionality for logged-in members, and rewards for brand evangelism.

The goal is to make these exclusive experiences feel natural, like interacting with a gifted sales associate who knows your preferences.

Increasing CLV FAQ

What are the methods for increasing customer value?

Some methods for increasing customer value include providing excellent customer service, using data to customize marketing campaigns, starting a loyalty program, and regularly interacting with customers and building relationships.

How would you optimize customer lifetime value for your business idea?

To start, identify your target customer base and their needs. Then, design products or services to solve those needs. Put tools in place early on for measuring customer lifetime value and keeping customers engaged and happy to encourage repeat business.

How do you increase customer lifetime value in B2B?

To increase customer lifetime value in B2B, carry out strategies like personalizing service offerings based on specific business problems, offering tiered pricing or volume discounts, and building strong relationships. It’s also important to deliver consistent value and quality in your products or services.

Why is it important to increase customer lifetime value?

Increasing customer lifetime value is important because it is cheaper to retain existing customers than to acquire new ones. Your customer’s lifetime value increases when they’re loyal, regularly engage with you, and buy your stuff often. Loyalty not only increases profitability, it also builds a strong reputation and word-of-mouth referrals.