Jul 30, 2022
In Wellness Forum
Encourage annual billing If you're offering a recurring service like SaaS, the amount customers will continue to pay is critical to increasing CLV. Customers who continue to pay for your products will bring you regular income. Conversely, users who only pay for your product for a month or two earn very little, not even enough to cover customer acquisition costs (CAC). When customers stay with you for an average of 10 months, it's easy to Latest Mailing Database convince them to do annual billing and reduce churn. This way, you will generate higher CLV and convince more potential customers on the quality of your product/service. Image credit: Grammar The annual billing cycle will also help you forecast revenue and improve business decisions in the process. Funds at your disposal during the annual billing cycle are available for investment in product development and company growth. The 12-month payment discounted version packaged as an annual fee is also cost-effective for your customers. This is an excellent persuasive point for their company to stay with you. 5. Upsells and Cross-Sells Upselling and cross-selling are two effective ways to increase the CLV of your business. Upselling sells a higher-priced version of your product or service. For example, if you offer SaaS, you might be inviting customers to upgrade their basic plan to a premium service. Figures show that upsells can generate 70-95% of revenue compared to 5-30% for first sales. Conversely, cross-selling is a method of selling complementary products or services to customers. For example, someone who wants to buy a web domain name might also be interested in web hosting. If you offer them both, you can cross-sell and increase the value of your purchase. Amazon is an example of a company that knows how to use upsells and cross-sells and get extra revenue from each sale. Image credit: Amazon Here are some tips for successfully cross-selling and upselling to customers: Bundled products : Group various products and services together and sell them at a discounted price. This will increase purchase value by offering a complementary product mix. Short-term upgrades : Free temporary upgrades to the Premium plan for basic users as soon as you update features. A large percentage of users can transition to premium features when they have the opportunity to use it for free. Free Shipping : Who would say no to free shipping, right? However, the combination of free shipping and minimum order size makes it more attractive to customers. Customers would rather spend their money on shipping another product. Limitation advice : Don't drive away potential buyers with too many options. Only basic accessory products are recommended. When given a choice, they would rather choose three products than ten.