6 Ways To Boost CLV (Customer Lifetime Value)

For your business to flourish, there are two actions needed from your side. First, acquiring a customer, and second, retaining them.

Currently, are you aware of how much business a customer brings you? And do you know what you can do to improve customer onboarding? Are you looking for ways to grow repeat purchases and hence profitability?

The answer to the above questions drills down to focusing on CLV. In the following sections, we will explain what Customer Lifetime Value (CLV) is about, how to calculate it, and what you can do to improve it.

What is Customer Lifetime Value?

CLV, or Customer Lifetime Value, is a metric that tells you how much profit your company can make from a customer over time. Understanding its correct definition helps businesses accurately determine their investment in existing customers to drive future revenue.

According to HubSpot, the cost of acquiring a customer has increased by almost 50% for most brands. Hence, it only makes more sense to invest in maintaining your existing relations with your customer.

customer lifetime value graph
Image: webpals.com

Moreover, when we say customer lifetime value, we are not necessarily calculating profits from a customer over their actual lifetime. Even if we take 15-25 years of estimated business, a lot can change in this time, including trends, competition, and the cost factor that will leave your current estimation essentially meaningless. Keeping these issues in mind, it is more realistic to keep your estimations tight for about three years. In the next section, we will see how we can go about doing that.

How to Calculate CLV?

CLV is a customer-centric metric and a powerful base to build upon to retain your valuable customers and improve their experience.

There are four key performance indices that determine your CLV: Average value of sales, purchase frequency, churn rate, and gross margin. Taking a look at each of these shall help you determine where you might be lagging behind. Using these KPIs, you can then calculate your CLV, the simplest formula for which is:

LTV = (Average value of sales) x (Purchase frequency) x (Average retention time)

Another formula that’s preferred is:

CLV = (ARPA) / (Churn Rate)

Where the churn rate is the rate at which your customers cancel their subscription, and ARPA is the average revenue per account.

Customer lifetime value (CLV) calculation
Image: clevertap.com

6 Practical Methods To Boost CLV

Now that you know how to calculate your Customer Lifetime Value, here are six highly practical and widely accepted techniques to boost the metric.

1. Improve Your Onboarding Process

Understand that the first impressions matter the most and hence you must prioritize optimizing your customer onboarding process. How can you do that? Make their first encounter as smooth and enjoyable as possible.

You can, for instance, host a webinar, create quick how-to videos or written tutorials that will help hasten up the process. If your customers come from different walks of life, you can try to personalize their experience by offering content in their language or in a manner they will understand. It makes them feel welcome. Moreover, if you are an online business and require a lot of information on their part, including their identification and other personal data, ask for it in multiple steps by segmenting the signup process.

Explaining what you do in a short and simplified manner prevents your clients from getting scared off.

2. Invest in Live Chat for Real-time Support and Engagement

People are always short on patience and want to resolve their problems as soon as possible. A delay on your part reflects that you don’t care about your customers. Making yourself easily accessible to your customers is a key tactic you should adopt to maintain a high CLV. For example, you can have a chatbot for non-working hours and invest in live chat software for all the other times. Now, you can analyze your chat performance and even video-chat with your clients if your business so requires it.

Live Chat Software For Customer Support And Sales Acquire
Image: acquire.io

Round-the-clock customer support and ensuring that your team is quick in responding to complaints will ensure that your customers stay with you for long.

While telephonic systems are not going to be replaced any time soon, people generally prefer a chat-based resolution because it is speedy and makes your brand feel more human. Also, you shall require fewer support-staff to handle the volume on live chat.

3. Leverage Customer Success Software

Another intuitive way to increase the overall lifetime of your customers is by leveraging Customer Success or CRM Software. It is a tool designed specifically to help your customers better utilize your product or service to achieve their goals. Such software monitors key performance indicators and uses them to help foster relationships with your clients.

How can such tools benefit CLV? Well, it’s quite direct, actually. This tool decreases customer churn while creating more opportunities to upsell and cross-sell. But what’s more is that it highlights your brand image, thereby increasing customer retention.

Most competitive customer success software come with options that let you automatically monitor key customer contacts so that you know when they’ve moved to a new position or switched jobs. With features that allow you to keep track of customer goals getting your hands on a customer success software accurately demonstrates your ROI.

4. Persuade Users to Switch to Annual Billing Cycle

A membership program that offers the customers a discount for long-term engagement is one of the most direct ways to boost retention. When your customers first sign up, you should recommend they get your annual plan. If not, you can send reminders intermittently after they have been associated with you for a couple of months.

Since your clients have penetrated the trust barrier, annual billing cycles encourage your customers to stick around for longer. You can further incentivize this by including a free product or longer service term.

5. Focus on Upsell and Cross-Sell

Upselling and cross-selling are some of the most fundamental techniques to improve your CLV, and in turn, your revenue. Introducing upsells and cross-sells in your marketing program increases your sales volume almost immediately, and it just might be the easiest method to grow your revenue.

Why? Well, your existing customers already trust you, and getting them to buy again is much easier and substantially more efficient than selling to random people on the street.

cross-sell vs upsell
Image: evolvedcontact.com.au

Although while upselling, the trick is to not annoy your customers. Never pressurize your patrons, especially for buying products and services irrelevant to them. This will only sour your relationship with your clients and will lead to the risk of you losing them altogether. Hence, it is best to strategically analyze which of your offerings suit them the best and then time your sales calls.

6. Create a Customer Loyalty Program

If you want your CLV to take a moonshot, starting a solid loyalty program is the way to go. It’s simple — your customers get rewards or points for staying associated with you, allowing them to use those points to get something tangible. There is a reason why banks and supermarkets offer reward points for purchases — the system just works. Again, if yours is an online business, find a way to reward your customers for the recurrent purchases that they make.

According to Bain & Company, a 5% increase in customer retention can lead to a 25-95% rise in profits for B2B businesses; a customer loyalty program is the best technique to keep your clients hooked.


In these competitive times, it is paramount for your business to calculate, track, and boost your customer lifetime value. Since it is all about investing your resources to make profitable decisions, through this article, we hope you now have a makeshift roadmap to retain your customers and feasibly achieve your goals of growing your business.

If you want to capture, track & close all opportunities from every single contact and manage multiple products and spot upsell/cross-sell opportunities to increase your CLV, do try LeadSquared Opportunity Management CRM.

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Dhruv Mehta

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