From initial contact to repeat buyer and finally to loyal customer and brand advocate, the importance of customer loyalty can be seen in the amount of money spent in that time. The customer may be disloyal for other reasons in the future: they may be very price sensitive or have a bad service experience. But it can be costly and time-consuming because that customer has to be persuaded to buy your products. Lifetime value is the amount of money customers spend with you from their first purchase to their last (or cancellation).
Companies with zero customer loyalty are forced to play this game, offering ever-increasing discounts to attract new customers. For SaaS companies in particular, customer loyalty is one of those murky areas that are important but often not well understood. It delivers the predictable, cost-effective results your business demands and the highly personalised omnichannel experiences your customers deserve. Consequently, increasing CLV positively affects customer retention, as it means that the frequency and value of purchases increases over time.
Increased customer retention can increase your bottom line profit by 25% to 100%, depending on your fixed costs. Improving your customers' experience not only improves their loyalty, but makes them more likely to recommend you as well. Remember that loyalty is a genuine emotional attachment that occurs when your customers appreciate the value of your product or service as well as the way you deliver it. Customer loyalty is the act of consistently choosing a company's products and services over those of its competitors.
If you know how to build customer loyalty in the retail sector and beyond, you will make your customers feel valued. It goes without saying, but loyal customers are the most likely to buy from you again. From the first sale to the most recent purchase, this metric goes a long way to explaining the value of customer loyalty and retention.