Being in eCommerce means you need to focus on more than just the short-term goal of Conversion Rate Optimisation. Instead, it’s essential to look at the big picture — zeroing in on Customer Value Optimisation, which considers multiple metrics, including Customer Lifetime Value (CLV).

But with all the acronyms thrown around, keeping track can be challenging. So what is CLV, and why is it important? That’s what this blog is all about.

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What is CLV & How to Calculate it

CLV predicts the net profit attributed to a customer's future relationship. In layman’s terms, it's an estimate of how much money a customer will spend on your products or services over the course of their lifetime.


Here is the formula for calculating CLV:


Customer Lifetime Value Formula


If your average sale price is £50, the number of sales per year is 2, and the customer lifespan (average retention plan) is five years, then that customer is worth £500 to your business.


That being said, CLV is only a prediction; it’s not concrete. Many factors can influence a customer’s spending habits, including changes in their personal or professional life, new competitors in your industry, or a shift in industry trends. 


But when you understand where your CLV stands, you can make informed decisions on how to allocate your resources, such as marketing and customer service, to maximise the value of your customer base. 


One of the most significant benefits of improving CLV is that it can lead to increased profitability. By focusing on retaining customers and acquiring new ones with a high potential CLV, you can improve the overall lifetime value of your customers.


Top 7 Strategies to Improve CLV

Now that you know why CLV is so essential and how to calculate it, it’s time to strategise and create definitive plans of action to improve your CLV — no matter how high it already is. 

Loyalty Programs:

Introducing a loyalty program like with LoyaltyLion will increase the chances of customers returning. All excellent loyalty programs have tiers which drive customers to push their way to the top and get more rewards. And who doesn’t love free stuff?

On-Site Quiz

An on-site quiz with a tool like Octane AI will not only give your customers an easy and fun way to find what they need, but it will also provide you with critical zero-party data — allowing you to target customers individually with relevant information.

Subscription-Based Products

Adding a subscription option to your products is a great way to ensure repeat revenue. While this strategy will not suit every brand, if you have products that are used frequently and need to be replaced, it makes repeat revenue a given and eases the life of your customers.


We cannot highlight the importance of personalisation enough. It’s key in today’s digital age. Using data and insights to create personalised emails, product recommendations, and special offers, you can make customers feel as valued as they are, increasing the likelihood of them returning. 

Upselling and Cross-Selling:

By offering a better version or complementary item compared to the product the customer is about to purchase, you’ll increase the average purchase value and boost your CLV. This can also take place in email marketing, not only on-site.

Win Back Lost Customers:

Sometimes customers fall out of love with your brand. Or they’ve had massive life changes. Don’t be afraid to reach out and try to win them back. Requesting that they do surveys so you can know more about what impacts their decisions around your brand is an excellent way to find pain points. And who knows? Maybe they’ll give you a second chance. 

Customer Segmentation:

You can use customer segmentation to identify high-value customers and create targeted marketing campaigns to attract and retain them. As mentioned above, surveys will help you gain valuable customer feedback to identify areas of improvement so you can create actionable insights.

Blend & CLV

CLV is a crucial metric for eCommerce success, and several strategies can be implemented to improve it, over and above what we’ve mentioned here. By retaining existing customers, you can improve the overall lifetime value of your customers and increase your profitability. 

As we said before, though, remember that CLV is simply a prediction; as such, it’s important to track and monitor the metric over time and make adjustments to your strategies as needed. 

CLV will help you build long-lasting, profitable relationships with your customers — the ultimate goal of any eCommerce business. If you want to take Customer Value Optimisation head-on, get in touch with us at Blend today.

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Marketing Executive Jade has a gift: her writing is both brilliantly clever and effortlessly funny. She's a Marketing Executive who puts her all into every project, and it shows. Not just in the stellar copy she crafts, but also in the extra effort she always gives, both to her team and clients. With her keen sense of humour and straight-to-the-point style, Jade truly makes our team shine and our content stands out. Beyond her talent, it's her genuine kindness and unwavering dedication that endears her to everyone. In many ways, she's the heartbeat of our team, bringing life and laughter to everything she touches.

Published: January 30 2023

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