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3 Email Automation Strategies to Increase Customer LTV

Use email automation to focus on increasing customer lifetime value (CLTV), a crucial metric for any eCommerce business. Better experience means higher ROI. Here are three smart strategies for fast measurable results from Sendlane - an OMG partner, and leader in all things email automation.

Customer lifetime value (LTV) is a bit of a funny thing in the eCommerce marketing world. A lot of marketers have various definitions for it and go about calculating it in different ways.

Generally, Customer LTV is based on predictions; we aim to predict how much revenue a single customer will generate for our brand during the lifetime of their relationship with us. 

Source: Retently


That’s a tricky number to get right. 

No matter what number you land on or the definition you use, we can all agree that we want to increase this number. Why? 

In a word: Retention. 

A focus on increasing customer LTV is a long-term strategy based on the need to keep customers (that you’ve worked hard for) coming back for more. 

That takes time, testing new strategies, and continually building relationships with customers through a better experience. 

All the data points to better experiences, equalling high ROI for brands. 

And while you can spend time on many different parts of your marketing to improve your experience, email is by and large the best channel to start with since it has fast and measurable results. 

 

How to use email automation to increase your Customer Lifetime-Value (CLV) 

It’s easy to get caught up in the endorphin rush of customer acquisition. 

Let’s be honest; getting people to go from interested to becoming a first-time customer is super exciting.  

But the average customer acquisition cost (CAC) for a single eCommerce customer is just shy of $45.50. At that rate, 100 new customers would cost you roughly $4,550, and if your average order value is below the CAC, then you’re in the red, and that isn’t good, my friend. 

Obviously, getting new customers into your brand’s loving arms is essential. But once they’re there, you want to keep them happily coming back for more!

That’s how you increase customer LTV. 

Below I’ve put together some high-level strategies that we use here at Sendlane to help our customers grow their eCommerce businesses. 

 

1. Create strategic email segments 

In short, email segments create smaller groups out of your full contact audience so you can send highly-targeted and personalized content to each and every customer. 

However, there are two truths about segments that we tend to forget: 

  1. The value of each segment is rarely the same.

  2. You should always have a strategy in place for the segments you create.

For instance, if you create a segment based on average order value (AOV), then naturally, this segment will have more value and likely drive more revenue than one that collects together customers with lower AOV. 

At the same time, you’d still want to create a segment for a lower AOV and make efforts to increase this metric from this group. 

That’s where the strategy part comes in.

When you create your segments, it’s essential to have some strategy around what you’re going to do with them after they’re designed and if they’ll receive any automations when they’re added to that list. 

When using some ESPs, you can create segments based on your Customer LTV. 

Using the strategy above, you’ll create 2-3 LTV segments from low to high. Then, customers would be automatically sorted into these segments.

The end goal of each lower LTV list would be to move them up to the next bracket. 

To help you do that, you can set an automation triggered when a person is added to that segment. 

Perhaps that automation would include product recommendations, another discount, or an up-sell. No matter what you decide, the plan would be to build a relationship to give that customer a little bump from the Lower LTV to the Higher LTV brackets. 

And this isn’t the only segment you can create to increase LTV. Here are a few more you can build out: 

a. Average order value (we covered that earlier).


 

b. Products purchased. You can then trigger an automated up-sell or personalized product recommendation emails after they’re added here. 

 

c. Number of orders. You can create brackets for this like with AOV or LTV with the goal of moving them up your segment ladder. 
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d. Interests and Preferences. This is important for personalization. And the more personalized your content is, the better chance you have of gaining repeat customers. 

 

Each segment has a different value, but when you see the overarching goal of increasing your LTV, you can begin to figure out how you’ll use these segments to reach that goal!

 

2. Make sure you have the right type of post-purchase automations in place 

After someone makes a purchase, most online stores will send at least two emails: 

  • The “ we’ve received your order” confirmation email.

  • The “your product has shipped” email.

And that’s about it.

Many don’t realize that this is the prime time to double down on customer experience and add even more sales. 

So you should consider adding a few more email types to your post-purchase email funnels

Here are a few I highly recommend: 

a. Thank you for your purchase! You can take a moment to use this email to show more about your brand, how their purchase helps support a cause, or simply let your customer know more about how their order will be handled. Either way, saying thank you is always a nice touch.

 

b. Ask for a review or feedback. You need to know how you’re doing after your customer has made a purchase. If not, you can’t make changes to be better. Plus, asking for a review can stack you with some excellent ratings that you can use to support efforts in other marketing areas. And if they do leave a review, you can have that trigger another automation flow. A high rating gets them a discount, and a low rating gets them in touch with a customer service rep to resolve the issue while offering a discount or other way to solve the problem.

 

c. Offer personalized product recommendations. This is a big one. Did you know that product recommendations can increase profits by 369%? Using these as part of your automation after purchase can help boost sales quickly since they’re personalized and sent right after the person has already bought from you. Up-sells and cross-sells would count here as well. 

d. Offer a discount. I know it’s not always the best to do this, but it’s not a terrible ploy when looking at increasing LTV.

Spend some time here. 

Post-purchase emails can do a lot to bring in revenue for your business, and setting up some automations to do all the heavy lifting for you will make everything easier. 

 

3. Test out customer loyalty programs 

It’s no secret that customer loyalty and rewards programs get people coming back for more. Brands across nearly every industry use these to help retain more customers, and customers love it. 

73% of millennials and 48% of generation Z said their purchases are influenced directly by loyalty programs. What’s also impressive is that these programs can dramatically increase customer LTV, too.

For example, online specialty grocery brand Swiss Rasoi decided to implement a loyalty program for their niche. 

Within a year, they were able to double their customer LTV. That increase in revenue is no laughing matter and one that should perk our ears up. 

Large brands are utilizing loyalty programs too.

Take Starbucks, for instance. They have a booming business, but they still invested in a customer loyalty program.  As a result of that and other marketing efforts, they have a customer LTV of $14,099

And guess what they use to boost that loyalty program? If you thought of email, ring the bell! 

You’re right. 

Loyalty programs in tandem with email marketing automation work wonders. And its something you can set up to keep customers coming back for more without making them feel like you’re pushing anything on them. 

There are a lot of third-party tools that can help you create a customer loyalty program, but whatever you choose, you should have some useful emails built into your automations: 

a.Thanks for signing up. Here’s how it works.” This email is your welcome email for your customer loyalty program. Let them know what they’re in and how they can earn rewards. 


 

b. “Early or exclusive deals.” People love feeling like they’re part of the “in-crowd.” You can help them feel like the special VIPs they are by email-exclusive deals only for those in your program. 

 

c. “Redemption reminder.” Let’s be real; we all have a lot going on. And I, for one, can never remember all the points I’ve built up with brands I shop with. I know I’m not alone in that one. This is why automated emails that remind people to check how many points they have or redeem those points are a great idea to get them back to your store and make purchases. 

We all love using our rewards to get something for free or at a good discount. Your audience does too. Loyalty programs are a great way to help customers trust you and naturally create custom LTV which is what you’re going for. 

Higher revenue with half the work

Email automation makes the life of all marketers easier. It’s cost-effective, helps find your best customers, and it continually works for bringing in revenue. 

Using it alongside the above strategies is a fantastic way to increase customer LTV. 

Your current customers are willing to buy from you again. All you have to do is nudge them a bit in the right direction. 

And with email automation, you can do just that.

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