Last updated on September 12th, 2024 at 04:15 pm

Understanding and optimizing customer lifetime value is essential for brands looking to build sustainable growth, foster customer loyalty, and increase profitability over time.

Retailers seeking to drive customer lifetime value should start by examining their in-store and mobile shopping experiences. 

In this article, we cover:

• What Is Customer Lifetime Value?
• How to Calculate Customer Lifetime Value
• How to Increase Customer Lifetime Value: 13 Tactics
• Why Customer Lifetime Value Matters for Omnichannel Brands

What Is Customer Lifetime Value?

Customer lifetime value (CLV) refers to the ultimate dollar amount a company is likely to gain from an individual customer during the lifespan of that customer’s relationship with the brand.

By analyzing CLV, businesses can make more informed decisions regarding customer acquisition, retention, and marketing strategies. 

How to Calculate Customer Lifetime Value

Calculating customer lifetime value involves estimating the revenue that a customer will generate over their entire relationship with the company and subtracting the costs associated with serving that customer.

Customer lifetime value serves as a great method for highlighting whether a brand’s retention efforts and spending on customer acquisition efforts are successful. It also helps companies assess profit margins and forecast future revenue. Additionally, the more that brands understand how their customers shop, the easier they can use that information to tailor their promotional tactics.

How to Increase Customer Lifetime Value: 13 Tactics

To increase customer lifetime value retail brands must focus on strategies that foster long-term relationships and repeat business. By implementing targeted initiatives that prioritize customer satisfaction, engagement, and loyalty, brands can maximize the value of each customer over their entire lifecycle. Below, we detail how to increase customer lifetime value through the creation of streamlined, impactful shopping experiences.

1. Easy checkout experiences

Consumers will be much more likely to first enter a store, and later make a purchase, if they don’t spot long lines stemming from the checkout counter. To combat extensive waiting periods, brands can equip their sales associates with mobile point-of-sale (POS) devices that allow associates to check out shoppers from any point in the store.

2. Endless aisle 

Ensuring customers know they can still obtain an out-of-stock item through your company is crucial; otherwise, the sale is likely lost. With the endless aisle approach, you eliminate concerns about customers leaving empty-handed and disappointed – every product, color, and size is readily available for purchase. By salvaging these sales, retail brands enhance the shopping experience and boost in-store sales, ultimately fostering customer satisfaction and loyalty.

3. Personalized experiences 

These days, consumers are on the hunt for personalized experiences. And as the retail marketplace grows more crowded, brands must ensure they forge personalized connections with customers in order to stand out among the competition. Clienteling enables store associates to create customized shopping experiences by accessing a 360-degree view of the shopper. 

Clienteling also helps facilitate personal outreach after the customer leaves the store. For example, if a customer wants to mull over a potential purchase and leaves the store empty handed, the sales associate can later follow up via text or email to provide more information about that product – possibly with a discount code to cinch the sale.

4. Upselling and cross-selling

By creating and storing profiles of your customers, containing their preferred sizes and styles, team members can access this information to cross-sell and upsell them products. Successful cross-selling and upselling demonstrates a deep understanding of the customer’s preferences and aspirations, fostering a sense of personalized service and strengthening the bond between the customer and the brand. As customers become more engaged with a brand, they are more likely to explore and purchase additional products or services, further increasing their lifetime value to the business.

5. Order fulfillment options

Consumers will be much more likely to make purchases over the long term if they know they’ll receive their orders quickly. Retailers with omnichannel order management solutions in place can leverage various store fulfillment strategies, including buy online pickup in-store and ship from store, to get purchases in customers’ hands faster. 

It’s critical that customers have a slew of order fulfillment options so they can select the one that best fits their schedules. For instance, some customers may want orders delivered directly to their doorsteps, while others may prefer to pick up purchases from a nearby brick-and-mortar location that same day, if their items are in stock.

Offering a variety of order fulfillment options is a key piece of brands’ customer retention strategies, especially as ecommerce behemoths like Amazon shift consumers’ expectations around rapid shipping.

6. Easy returns

By providing customers with flexible return policies, such as in-store returns, mail-in returns, or drop-off locations, brands can enhance the overall shopping experience and instill confidence in their customers. Offering multiple return options encourages customers to make purchases with the assurance that they can easily return or exchange items if needed, resulting in higher conversion rates and increased repeat purchases. Moreover, a hassle-free return experience can turn potentially negative situations into positive ones, fostering positive word-of-mouth referrals and customer advocacy.

7. Loyalty programs

One of the most effective methods of increasing CLV centers on offering a loyalty program. Loyalty programs fuel higher purchase volume by motivating members to participate and attempt to reach certain thresholds to unlock more incentives. These incentives can include earning points for each purchase – which can then be redeemed for discounts or free products – as well as participation-based perks, like collecting points for completing surveys about potential new items or submitting product reviews for the app and website.

8. Promotional discounts

Retail promotions are another way to target customers with exclusive deals. Retailers can cherry-pick the types of promotional discounts they believe will best resonate with their audiences. Some of these may include free shipping, percentage discounts (such as 20% off one full-priced item), buy one, get one deals, tiered promotions (which offer higher discounts to customers who buy more items, such as $30 off a purchase of $100 or more), and free gifts with purchase.

If shoppers know they can expect to receive retail promotions on a frequent basis, they will be much more likely to be a regular shopper.

9. Mobile-only perks

If retailers can persuade customers to give up a portion of their smartphone’s real estate and download their mobile app, they can keep customers engaged by offering mobile-only perks. For example, if the brand offers app users free shipping on all orders, that serves as a major incentive to shop using the app. 

It also helps drive more sales over a long period of time, as consumers will know they can make a purchase whenever they want, without worrying about shipping fees. Another mobile-only perk is exclusive content, such as videos from a celebrity spokesperson and surveys that let customers weigh in on styles for future products – all of which can make customers more invested in their relationship with the brand.

10. Referral programs

Referral programs harness the advocacy of existing customers to attract new ones. By incentivizing referrals through rewards or benefits, brands empower their satisfied customers to actively promote their brand within their social circles. 

Integrating the referral program seamlessly across multiple touchpoints, including websites, mobile apps, and social media, ensures accessibility and convenience for customers. Ultimately, a well-executed referral program not only facilitates customer acquisition but also cultivates brand loyalty and drives sustainable growth.

11. Build a community

Building a sense of community and fostering engagement among customers is essential for increasing CLV and cultivating long-term brand loyalty. One way to achieve this is by creating communities where customers can connect, share experiences, and interact with each other. These communities can take the form of social media groups, virtual or in-person events, or user-generated content platforms where customers can ask questions, provide feedback, and offer support to fellow community members. 

These communities have different value adds. For example, encouraging user-generated content, such as customer reviews, testimonials, and product photos, serves as authentic social proof for prospective customers, while organizing offline events or meetups further strengthens the sense of community by providing opportunities for face-to-face interaction and relationship-building.

By facilitating these interactions, brands not only strengthen the bond between customers but also position themselves as trusted authorities within their niche. Furthermore, actively participating in these communities allows brands to gain valuable insights into customer preferences, pain points, and emerging trends, which can inform product development and marketing strategies. 

12. Ask for feedback

By soliciting feedback from customers, brands gain valuable insights into their preferences, pain points, and expectations, allowing them to make informed decisions to better serve their audience. Actively seeking feedback also demonstrates a commitment to listening and responding to customer needs, fostering a sense of trust and engagement among customers. Additionally, leveraging customer feedback enables brands to tailor their marketing efforts and communication strategies, delivering more personalized and relevant experiences to their audience. 

Ultimately, by incorporating feedback into their business practices, retail brands can drive sustained growth, strengthen customer relationships, and increase CLV over time.

13. Personalized marketing efforts

By tailoring marketing messages and promotions to individual customer preferences, purchase history, and behavior, brands can create more relevant and engaging experiences that resonate with their audience. Personalized campaigns enable brands to deliver targeted offers and recommendations, increasing the average order value and overall CLV. 

Why Customer Lifetime Value Matters for Omnichannel Brands

While measuring customer CLV is important for any retailer, it’s especially critical for those with a heavy focus on expanding and refining their omnichannel capabilities.

Improving customer lifetime value helps brands understand how and where their customers prefer to shop. If a brand discovers that many of its sales are stemming from its mobile site, that data should prompt a decision to invest in building a native app. 

Ultimately, keeping a close eye on CLV can help inform retailers’ omnichannel strategies and make a notable impact on how they choose to foster long-term relationships with new and existing customers.

Interested in discovering how your brand can increase its customer lifetime value? Speak with one of our experts today.

Last updated on March 23rd, 2026 at 10:52 am

Establishing long-term customer loyalty is at the top of every retailer’s wish list. To achieve this, retailers should segment their customer relationship management frameworks by regional audience and pinpoint what their loyalty objectives are trying to solve for. Not only will this help them stand out in the competitive marketplace, but it will also drive greater customer retention.

Gianfranco Cuzziol, International CRM and Personalization Lead for Natura & Co’s Avon brand until February 2024 (and current Business Lead at Dr. Martens), recently discussed the thought process behind developing a global customer relationship management (CRM) framework during an Endless Aisle podcast episode with Marcus LaRobardiere, NewStore’s Vice President of Marketing. Gianfranco and Marcus also defined various types of customer loyalty – including advocacy and retention loyalty – and addressed how those impact consumers’ long-term relationships with brands.

Read below for several key takeaways from Marcus and Gianfranco’s conversation, and click here to listen to the full podcast episode.

Creating a Global CRM Framework 

As the global marketplace grows more crowded, retailers must evolve their CRM frameworks to better reach audiences around the world. According to Gianfranco, retailers should begin this process by developing a common framework and then allowing teams in regional markets to adapt the framework according to their specific needs.

“There is often a need to say, ‘Look, let’s draw a line under this,’” Gianfranco said. “Let’s create this common framework across the globe so we’re protecting the brand. Then, we’ll bring you all up to a certain degree of maturity [to] understand the way we do CRM, automation, personalization…

“That allows you to have some flexibility within the framework to deliver to your requirements, because you have your own objectives, depending on the business unit or the market you’re sitting in.”

This results in retailers needing to create segmentation models based on how customers in various parts of the world prefer to shop.

“We created this segmentation model and a customer lifetime value model for the globe,” Gianfranco said. “But it became apparent that having a global customer lifetime value model didn’t really work. 

“The way that customers transacted and shopped in the far east was completely different to how they transacted in Australia. We then had to drill down and provide a segmentation model that was fit for purpose for each of the four regions.”

CRM Implementation with Cultural Differences

A key piece of developing a strong CRM framework stems from incorporating cultural nuances and ensuring that regional teams understand the rationale behind all decisions.

“Part of the new tech vision data implementation also involved a certain amount of cultural work,” Gianfranco said. “We needed to make sure that we took the regional retail and marketing teams – and digital teams – along the journey, and make sure they were fully bought into that vision. 

“We had consultants in store who were slightly reticent about collecting customer information,” he continued. “So we needed to go through a training exercise to prove to them that there was value in collecting a customer email address and name.”

If sales associates understand the objective behind each step of the framework – and how it impacts them personally – they will be much more likely to develop better customer relationships, which in turn will drive stronger customer loyalty to the brand.

“The welcome journey we implemented was from the store you made your first purchase in,” Gianfranco said. “We want you to have that relationship with the store, if not the consultant as well.

“You spent that time converting that prospect into a customer, and we want to reward you by making sure the customer comes back to you. We did the very simple thing of saying, ‘We can prove to you that for a customer for whom we have an email address, here’s the incremental value it brings back to the business, and hence to your store, by you collecting that.’ And so there was part of that cultural education piece we needed to deliver.”

Defining Customer Loyalty

In addition to developing adaptable CRM frameworks, retailers seeking to prioritize retention should focus on fostering long-term customer loyalty. Part of this strategy includes defining the end goal of driving customer loyalty – whether it’s trying to increase customers’ average basket size, creating brand advocates that will spread the word among friends and family, or retaining existing customers with retail promotion strategies.

“[There are] many definitions of what loyalty is,” Gianfranco said. “It doesn’t matter which organization you work in – try and work out what you mean by loyalty and identify what loyalty means to your customer. [As an example], there’s behavioral loyalty. I shop every day at my local mini-mart. I’m not necessarily loyal to them; it’s just that they happen to be about 50 yards from my house.

“And then you’ve got advocacy loyalty,” he continued. “If you come up to me and say, ‘Would you recommend a BMW as a car,’ I would say yes. I don’t own a BMW, but I have owned [a] BMW, and it’s an amazing driving experience. 

“And then there’s retention loyalty [where] lots of freebies come my way. You need to make sure you think about loyalty, what it means, and whether you’re trying to drive loyalty, [or] whether in reality what you’re trying to drive is more frequent purchase.”

Developing Customer Personas

Gianfranco also noted that developing customer personas yields better personalization opportunities. A customer persona refers to an archetypal profile of a target customer, complete with behaviors, needs, and motivations.

“I think personas have their place and often [are] the starting point to more refined personalization,” Gianfranco said. “For example, when a customer first comes to your website, you know nothing about that customer. You might know where they’ve come from because you’ve tracked where they’ve clicked in from. You start to understand the product they’re looking at. 

“But as you start to acquire data points about that customer, as they spend time on that website, as they perhaps register [for] a newsletter or talk to your agent online – that’s when you can start moving into more sophisticated, relevant conversations with that customer,” he continued.

“[For example], in the beauty space, you’ve bought a cleanser and a toner. Here’s the hydrator that goes along with that. You need to make sure the information you’re giving a customer is relevant to that particular product – how to use it; when you should be replenishing that product; what’s an alternative if it’s not right for you.”

Balancing Customer Personalization with Privacy

While customer personalization is key to attaining and retaining shoppers, it’s also imperative to keep in mind that privacy is a top concern for many individuals, especially as AI in retail continues gaining momentum. Therefore, retailers must be forthcoming about their privacy policies and remain compliant with them in order to maintain customers’ trust.

“There’s this privacy personalization paradox – customers want a personalized, relevant, connected experience, but they also want you to be mindful of their privacy,” Gianfranco said. 

“What I found is that upfront, if you can be as transparent and honest as possible with customers, they’re more likely to trust you with their data. Be consistent with the way you apply that – don’t all of a sudden change the way you use the data without having talked to the customer.”

Connected, Adaptive, and Relevant Shopping Experiences

Gianfranco also discussed the components of an ideal shopping experience, which hinge on retailers’ understanding that all customers begin their journeys with a specific mission in mind.

“With all this data and technology around at the moment, we have to remember that customers are on a mission,” Gianfranco said. “It could be, ‘I want to buy something really quickly. I’m going to do some research. I want to provide some feedback.’ So that’s the core piece we need to think about. What is the customer trying to do, and then how do we spin out the technology data and experience to deliver on that in the way the customer wants?

“I often talk about the ideal shopping experience…I call it CAR,” he continued. “It needs to be Connected, Adaptive, and Relevant. Because the customer’s trying to get from A to B, and that’s what CAR is there for us to do. You have to adapt that experience to meet [their] need.”

Prioritizing Customer Retention

Once retailers determine the type of customer loyalty they’re aiming for, they should then brainstorm strategies to prioritize customer retention. While reaching new audiences should always be a priority, the benefits of fostering long-term relationships with consumers can’t be overstated.

“We should be thinking about retaining customers more – treating our customers better,” Gianfranco said. “There are lots of numbers around how much more expensive it is to acquire new customers than retain an existing one. The one thing to bear in mind is that good acquisition makes good retention. 

“If you nail [retention loyalty], [it] then reduces your advertising costs, acquisition costs,” he continued. “And by nailing that and understanding what makes a good customer, it allows you to be smart in the acquisition space. You spend all that time and effort getting a new customer on board…don’t lose them.”

Interested in learning how your business can foster stronger customer loyalty and drive retention? Speak to one of our experts today.