5 Tips for Increasing Customer Lifetime Value on your Shopify Value

by Emily / Posted

Customer Lifetime Value (CLV) represents the total amount of money your customer might spend in your store during their lifetime.

Knowing these stats is important for helping you understand whether you should be spending more effort acquiring new customers, or more effort retaining the ones you do have.

Calculating CLV

The simplest way to calculate CLV is:

(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years)

For example, if a customer spends $5 on deodorant per month for 5 years, then the lifetime value of that customer is $5 x 12 months x 5 years = $300.


If you’re looking to increase your CLV for your Shopify store, follow these top 5 tips:

  1. Brand loyalty: It’s no surprise that customers who are loyal to their brand will continue to shop there and buy their products.

Take Apple for example: the majority of Apple’s customers tend to have multiple pieces from the collection.

Building brand loyalty helps increase your CLV because customers are more likely to return to your store and give you their custom.

One way to improve your brand loyalty is to make use of an online loyalty or rewards program.

If your rewards are attainable your customers know they exist which means they’re likely to spend more money in order to win them.

Be sure your loyalty program offers worthwhile rewards too. If you have a health food product, don’t give away high-sugar foods as a reward.

View every customer interaction as an opportunity to improve customer loyalty.

  1. Build relationships: You have a duty as a Shopify store owner to provide your customers with what you say you will provide them with. This means always aiming to go above and beyond. In doing so, you can hope to build long-lasting relationship with your customers.

This relationship can help increase your customer lifetime value as it moves your customers from short term achievements, into long term ones. In order to do this, you need to communicate with your customers.

If you can, provide multiple ways for them to contact you. Also, make sure you’re delivering on any expectations you set for your brand whether this be delivery times or special offers.

  1. Use Email to pre-emptively answer common questions, and provide customer education. You should never wait for customers to come to you with their concerns before you address an issue.

If something is causing concern for your customers, or might well be adding friction to your sale, then you need to pre-empt this and quell these thoughts.

Educating your customers means they become experts and are more informed to make correct purchase decisions.

Giving out free information does not go unnoticed with customers, and they’re more likely to do business with the company who are always providing knowledge and support.

  1. Up-sell and cross-sell: If you want to increase your customer lifetime value, try to up and cross sell at any opportunity.

Up-selling is where you take the value of a single item and increase it. For example, if you sold health supplements, you might try and up-sell to the larger packet.

However, cross-selling is where you offer your customer something related to that item they might also want. For example, if you sold bicycles, and someone recently purchased one, you might cross-sell and offer them a tire repair kit and pump.

  1. Make customer service easy: 76% of consumers say they view customer service as the true test of how much a company values them and 97% of global consumers say that customer service is very important or somewhat important in their choice of and loyalty to a brand.Incorporate customer feedback to improve everything from user experience to product features & design.

Increase customer lifetime value will increase revenue

When you increase your company’s customer lifetime value, you’re increasing your customer loyalty, and revenue too. Spend less time looking for new customers, and more time harnessing the relationships you have with your current ones.

If you’re interested in getting a loyalty program to help you out with maintaining loyalty for your e-commerce store, we recommend companies such as Loyalty Lion who specialise in rewarding your customers’ loyalty.

Click here to get 10% off your first year.

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