Unit 38 LO3 Analyse appropriate techniques and methods in order to increase customer lifetime value (e.g. cross-selling, loyalty, and upselling)-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

Assess the appropriate techniques and methods in order to increase customer lifetime value. This article will explore how to measure customer lifetime value, as well as some of the most effective ways to increase it. One of the key takeaways is that there are two components: a financial component (e.g., revenue) and an emotional component (e.g., satisfaction).

The research has shown that cross-selling, upselling, and loyalty programs can all help create greater customer lifetimes values for companies; however, not every company needs a loyalty program or even wants one.

For example, if you have low prices on your products then people will buy more often from you but they may not be loyal customers because they know their prices are so low.

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Also Read: Demonstrate an understanding of the concept of customer lifetime value, how to calculate it, and the different factors that influence it

Strategies for enhancing customer lifetimes values within both B2C and B2B contexts:

Strategies for building long-term customer relationships

Strategies for building long-term customer relationships include repeated positive contact. The best time to call prospects is when they’re not expecting it, early in the morning, late at night, or on weekends. This can be accomplished through junk phone calls or leaving messages about recent news your customers may be interested in and encourage them to provide their feedback.

Naturally, these types of interactions should also mention that you provide product expertise and have a vested interest in their businesses’ success; as well as share ideas about ways they could improve things and what your business has to offer that could help them achieve this goal. Studies show that prospects are more likely to buy upon hearing from a vendor-partner because they now see the vendor’s interest in their business rather than just an interested party.

Digital strategies, including increased connectivity with customers through mobile devices, apps, social media, and online chats/forums

Digital strategies, including increased connectivity with customers through mobile devices, apps, social media, and online chats/forums; as well as the potential to automate the more socially isolating parts of customer service interactions.

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However, it can also lead to higher costs and inefficient customer service. As result companies need to balance shareholder needs for efficiency with customer needs for human touch. Such considerations are reflected in how companies typically handle these new channels: opening them up on a limited basis or through different contact points such that they complement rather than replace humans’ interactions with customers. Companies should also be mindful of their target audiences when determining what communication methods will make the most sense for launching into digital spaces like social networks and message boards.

The Internet of Things and Cognitive systems can be tapped to glean insights from real-time data better than any human analyst to forecast trends, which will lead industries in a certain direction. It employs advanced search algorithms, like Google’s PageRank, that crawl the internet and index large volumes of data in its databases. These machine learning algorithms are continually improved by weighing their accuracy on previous inputs against feedback given by humans. Soon we’ll witness a new breed of powerful machines able to truly think for themselves coming into production as cognitive technologies advance (applicable not just to robotics).

Creating brand loyalty

Achieving brand loyalty requires developing emotional bonds that make a customer feel like they are part of an exclusive club. The quality of service is important, but the best brands go above and beyond in order to foster their customers’ sense of social attachment and belonging.

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Prospective buyers are often waylaid by the conflicting messages within marketing campaigns, causing them to question whether or not a particular company really values their future prospects or embodies certain behaviors that they value (e.g., charity). Brands can inspire long-lasting loyalty when consumers see themselves as being “involved” in the vision and mission of decision-makers who lead it.

Cross-selling and upselling

Cross-selling and upselling are two of the most effective ways to increase customer satisfaction, loyalty, and revenue. Retailers who do these well are able to maximize the lifetime value (LTV) of their customers.

There are two main goals when it comes to cross-sell and upselling:

  • To sell complementary products that don’t cannibalize each other, and
  • To increase revenue in order to better fund marketing campaigns designed to acquire more valuable customers.

Choosing the right rewards and incentives

Some of the things to consider when choosing a reward are what would motivate you to work for that reward, how does it compare to the cost of giving out and then replacing the reward (if it gets damaged or used up), and is it something everyone in your office will appreciate.

It’s best if there are some potential rewards that everyone in your office appreciates as this way everyone can get involved and more people are interested. It’s also good if they’re all within a similar price range so everyone has a fair chance at winning. Finally, make sure you have enough on hand as people will want to win them! And be selective about new ones too so they don’t start losing their appeal after a while because suddenly there’s no longer a prize to be won.

Developing multiple points and channels of contact

One great way to develop multiple points and channels of contact is by joining a Network Marketing company. This will expose you to various companies which promote products or services that are in your area of expertise.

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How many other things do you know about besides marketing? What bothers me the most is when I see people who go in the network marketing world, but they really want to be someone else, like an engineer or doctor, but then all their knowledge about that profession goes away because now they’re stuck with all this networking on the side of it.

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