Hunting down new clients because the current ones are dropping like flies is not a good strategy for contractors. Instead, the focus must be on improving CLV, short for customer lifetime value. While there is nothing wrong with working hard to expand your customer base, it is crucial to remember the value behind brand loyalty and customer retention.
But how can you improve customer lifetime value? That’s what we are here for. In this blog, we will discuss customer lifetime value, the role it plays in your business, and some of the most actionable ways to boost it successfully.
What is Customer Lifetime Value?
Customer Lifetime Value (CLV) is a marketing metric that signifies the total amount clients spend on your services and products over their lifespan. This marketing metric is all about customer satisfaction and retention. Therefore, one of the many ways to grow your construction business is to retain your present clients and increase their lifetime value.
In fact, the longer your satisfied clients remain with you, the more profit they bring to your construction business.
Why is CLV Important to Your Construction Business?
Customer Lifetime Value (CLV) is one of the most critical metrics to measure because the higher it is, the greater the revenue. So, understanding your client’s purchasing habits will give you a much clearer picture of how they constantly spend their money. This helps your tailor your offerings and marketing to encourage them to continue spending now and in the future.
Here are five reasons why CLV is significantly important:
- CLV gives you a better perspective of your retention efforts: A lower CLV indicates that your customer retention strategy is not working and needs to improve. It indicates how loyal your client is and how likely they are to split if the sector takes a turn for the worse.
- CLV helps you determine your digital marketing ROI: Comparing your CLV will reveal your marketing ROI, and a lower ratio is an indicator of a low ROI.
- CLV helps you figure out whether or not you can scale up your business: Your CLV must be significantly greater than your customer acquisition cost if you are planning on scaling your business.
- CLV helps you compare your company to other businesses: Determining your CLV will give you a better idea of how your construction business is performing compared to industry averages.
- CLV helps you deliver more value: When you know what makes your client continue purchasing from you, you can increase customer loyalty and deliver more value.
Ways to Improve Your Customer Lifetime Value
1. Improve the onboarding process
Onboarding is the process you must spare no effort to ensure continuous and sustainable business growth. It must be among your top priorities since a poorly executed onboarding process is one leading cause of churn (the measure of how many clients stop availing of your services or buying products). The more increased the churn, your CLV rate decreases. And you do not want that to happen, right?
Onboarding happens within the first few days, right after your clients make their first purchase. It is through your website that they search for info and connect with you. Now, make an effort to improve your website and its web pages. Fill in your web pages with a concise meta description.
A nicely put-together strategic onboarding procedure encourages your new prospects to come back for more and therefore increases your lifetime value to your construction company.
2. Offer High-end Customer Service
Quality customer service is an essential investment to help your construction business grow and increase client retention. If your customer service is below average, your target prospects will defect to the closest competitors even if the services you offer are above average. A study reveals that one-third of today’s consumers are most likely to switch brands after a single instance of poor customer service.
As such, it is essential to get your customer service right. Excellent customer service is equal to a better customer experience. And in turn, this will make your existing clients more likely to become long-term loyal clients.
3. Stay relevant with your online presence
Focus on your online presence and improve it. It is one of the most effective methods for boosting your CLV. The more relevant your construction brand is, the more you will be in your client’s minds the next time they consider having a purchase. Get involved in the world of Search Engine Optimization and create a strong online presence from there.
Find what SEO techniques that work best for your construction business.
4. Build relationships
Fostering good customer relationships is crucial to the continued success of your construction business. In fact, weaker relationships. Throughout your client journey and all your interactions with your client, it is essential to nurture a healthy bond. The key here is to make them feel valued, appreciated, and listened to, knowing they are dealing with a professional and proactive team.
Get to know your audience and tap into their expectations and feelings. Surveying your clients will provide you with a handful of insights, helping you to better deliver on your promises. Always pay proper attention to building relationships with the portions of your key contacts, customer base, and executive staff.
5. Understand the Acquisition Source
You can learn a great deal of important information about CLV by knowing which sources led them to your construction brand. In many instances, customer lifetime value is tied to organic sources, social channels, or media sources they are currently funneled through.
Your website is one of the acquisition sources. If you want to boost your CLV, focus on increasing your organic traffic. The more your web traffic is, the more convinced your clients are on the authority of your company and your website. On top of that, you will be continuously discovered by the target prospects of your search ranking.
6. Listen to your customers and collect actionable feedback
Happy and satisfied customers are loyal customers. So, growing your construction business without learning what your clients think of you is challenging. On the other hand, growing with actionable, detailed feedback is a far easier process.
Understanding your clients lets you prioritize many aspects of your construction business that fuel revenue growth and customer satisfaction while scaling down ineffective tactics. It gives actual data on how likely your current clients are to recommend your service or products to others.
7. Provide value-packed content that can keep your clients engaged
One of the best ways to retain clients is through email marketing. However, a lot of contractors have done it in the wrong way. We suggest you get your emails right this time. The best emails to send to your clients are the ones that emphasize your service or product value.
Every service or product delivers value. And the key to an effective message is to find the value and present it to your clients in such a way that shows your contribution. The email explaining the benefits you bring in goes further than another promotional email, and take note of that.
8. Focus on delivering immense value
The value your clients bring to your business is directly associated with the value your construction business brings to your clients. This creates a value chain. A value chain is when the value creation is conceived for both the shareholders and the clients. While the supply chain depicts the steps to take to get the product and service to the client, the value of the chain is the act of adding value to the relationships and connections to your clients.
In other words, the value of the chain influences customer satisfaction, giving your business a competitive edge.
9. Instill a customer-centric approach
Keeping your clients at the heart of everything is a crucial change you have to make when developing and maintaining relationships with your target prospects. If you put this into practice, your company will experience an increased CLV and decreased turnover. It takes commitment to build a customer-centric company. So, you better be prepared for this commitment. It is imperative to compel your customers’ values first and foster customer-focused thinking in your people.
This is no longer a buzzword but a prime principle that can effectively and directly affect your bottom line.
10. Offer your customers a personalized experience
Product, service, and experience personalization are fundamental nowadays, especially if your goal is to make your customers happy and stay in your business in the long run. B2B clients want a more personalized experience.
Personalization can help you boost your CLV in the long run:
- By getting to know your clients, you can improve the onboarding process, which is previously mentioned above, by making it feel more personal and familiar to your new clients.
- Personalization can help you deliver a better customer experience with a more personalized and intuitive UI.
- With a much better understanding of what your client needs, who they are, and what they feel, it becomes easier to boost CLV.
Improve Your Customer Lifetime Value with ConstructionMarketing.io
If you value your customers right now, your revenue will ultimately grow. And that always has been your goal. It is a matter of showing them how much they mean to your construction business by simply asking them for any feedback and acting on it. This is also to offer them precisely what they deserve and need with the utmost convenience and amazingly top-notch support.
Just in case you are looking for a great way to boost your CLV, ConstructionMarketing.io can help you. Our digital marketing services can help you retain your customers, escalate your client base and grow more of your construction business. Our marketing experts have broad knowledge and expertise in everything marketing and customer retention.
If you are ready to work with us, contact us today. Find out how we can boost your customer’s lifetime value.