The E-commerce business is online business of buying and selling of products via the internet on any device. E-Commerce business is the fastest growing retail market. This became possible through e-commerce apps. Large numbers of business houses have entered in to the field of e-commerce through their e-commerce apps.
There are a number of models to judge and evaluate an e-commerce business through app. You can judge the performance of your e-commerce business by looking into the conversion rates, bounce rate and CTRs. But the importance of Customer Lifetime Value cannot be ignored as it is one of the important metric to gauge the e-commerce business performance through app. You can engage a Top custom mobile app development company to get a e-commerce app developed for business as a well developed adds to the customers life time value.
Meaning and Importance of LTV of an App User: App user LTV (life time value) is value of app user or a customer who buys products and services online through an e-commerce app over the lifecycle of an app. It is the net present value attributed to a typical customer over their average buying lifetime. Knowing the retention rate of your app helps you to identify how much you should invest in customer retention. You can share your app on various platforms where your prospect of hanging out is great and your user recommending your app to his friends and relatives. The calculation of LTV helps you to plan for the future, make up your annual budget, and identify areas for improvements. This calculation help you plan and single out marketing campaigns that drive up costs and highlight customer queries that cost too much.
It is important to understand the LTV of the end users because this helps you to calculate and measure the return on investment (ROI) of your marketing campaign. Getting a new customer should not be the priority of marketers as it costs more than six to seven times to retain an old customer than acquiring a new one. Moreover the probability of selling to a new customer is 5 to 20 percent as compared to 60 to 70 percent to a already existing customer. So it is important for the marketers to create new strategies to gain the existing customer retention and lure him to continue purchasing their products and services.
To retain the existing customer marketers should incorporate this feature in the app itself. Users experience improvement is one such area where they should focus most in the app.
Ways of calculating the Lifetime Value of app users
There are three possible ways or formulas that you can calculate the users LTV.
- AOV or Average order value
- Average purchase per week, month or year
- Value per week, month or year.
To calculate LTV you have to take a sample of customers, determine how much they spend on the orders in the desired period (week, month, or year) and determine the average. After determining this average multiply with number of customers to get the average amount of spending for that time period.
How can an e-commerce App Increase a Customers Life time Value?
Many factors determine customer’s life time value, and mobile app is one of them. By increasing the life time value of app users you can secure high return on investment (ROI) of your marketing campaigns. There are several methods which can increase the LTV of customers and boost app usage. We now discuss in details all such methods which increase the LTV of customers and help you in achieving your objectives in a quicker pace and bring success in your e-commerce business.
- Go for mobile deep Linking in App: You can develop your app in such a way with deep linking process where the user of app can be directed to a particular location by using a URL link to a specific page, or location. Your app user can get relevant contents through variety of ways like notifications, SMS, email and social media. The idea behind this is that it allows users to reach their objectives without any delay.
- SEO for e-commerce: Customers feel happy if they find their preferred brand on the top of the search engine. It goes on to say a lot about the content and quality of your site. This can be done by investing in SEO for your e-commerce website or app, which will ensure that your customers always at the top of the search engine each time they go searching.
- Through Content marketing: In e-commerce business content is still kind. Search engines also reward sites with great contents. Content is the most valuable in online business. It is not possible to communicate your brand ideas without the effective content creation. Your contents should attract and retain your audience. Meaningful contents are the key to success in e-commerce business.
- Create cash back rewards: For shoppers a well crafted deal with cash back and rewards can be irresistible. They tend to purchase more than what they originally thought. A better sales promotion through leaves them feeling more happier with their purchases. Cashback and rewards encourage purchasers to repeat their order in future.
- Provide discounts for higher shopping cart value: Shoppers don’t spend more if you are just asking them to buy more. You have to offer them something more to lure them to cross their initial budget. The best way to encourage higher average order totals is to offer them some reward in form of discount when the customers add enough items to their shopping cart when they hit or cross a specific ordering limit.
- Provide best customer Service: Better customer service in e-commerce business plays a vital role in customer’s retention. This shows you care about your customers and not the money. Do some research for better customer service and present your customer with better choice. Top brands use dedicated twitter feeds for the customer service. Explore the social media and ask your customers to post their reviews and respond quickly to their queries.
- Email campaigns: Your app should have a perfectly structured on-site pop-up that entice them to register on your opt-in email. With this you can send them emails informing them your latest offering in a genuine way without been perceived as a scam. By sending your customers email like – shortly you will hear about your order dispatch, we are out of stock- or new offerings details will help you to win back customers. Use attractive subjects in your email and try to deliver your message in a concise and compelling manner to win their confidence.
All the methods referred above will help your e-commerce app to increase the customer’s lifetime value and in return help you to achieve your business goals. You can take the services of leading app development company to develop your e-commerce app which incorporates all the necessary elements which enhances the customer lifetime value.
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