9 Easy Ways to Increase Customer LTV in Ecommerce (2022)

Customer lifetime value (LTV) is a key metric for any eCommerce business.

It helps you understand the value of your customers, which in turn allows you to make smart decisions about how you grow your business.

But sometimes calculating LTV can be difficult—especially when it comes to determining a specific customer’s worth.

That’s why we’ve compiled a list of nine easy ways that companies can increase their ecommerce LTV by improving retention and increasing engagement with existing customers:

So How do You Increase Customer LTV in Ecommerce?

Let’s go over 9 ways to increase your customer LTV:

Variable pricing models

ecommerce LTV

You can use variable pricing models to increase your customer LTV.

Variable pricing is also known as dynamic pricing or price testing, and it involves using A/B testing to determine the best prices for a product or service.

Price elasticity is the measure of how much demand changes when the price of a good changes.

If you want to maximize revenue while also satisfying customers, you need to understand what price point will drive the most sales while maintaining high margins—and this is where price optimization comes in.

Promotional and referral programs

customer ltv ecommerce

  • Referral programs
  • Promotional programs

Referral programs are the perfect opportunity to reward your best customers for their loyalty and help you get more new customers.

They’re also a great way to increase customer lifetime value since these customers have already spent money with you in the past.

You can set up a referral or promotional program on your website, in-app, or through an email newsletter. For example:

  • If a customer refers a friend who makes a purchase (or multiple purchases), they will receive 2% off their own next order as well as 1% cash back on that order’s total value. This encourages them toward future spending while giving them something extra now — plus it’ll help build brand loyalty within the community of shoppers who shop at your store!

Strategic up-selling and cross-selling


Up-selling and cross-selling are important because they can increase LTV.

They work by offering a customer who has already bought a lower-priced product an opportunity to buy a higher-priced one, or offering customers who have already bought one product from the same brand an opportunity to buy another related product from the same brand.

Up-selling is often useful if you sell products in different categories, such as shoes and accessories.

For example, let’s say you sell shoes on your website—you might consider making it easy for customers to add accessories like socks or tights when they check out with their new pair of shoes.

Maybe these accessories aren’t exactly crucial but they do offer some value and will make your customers happy!

This can be especially effective if you know that people who buy shoes tend to also buy other items at higher price points (like handbags).

Price tests

Price tests are a great way to increase revenue.

You can run price tests on a per-product or per-category basis, and they’re also useful if you want to test a new price point for an existing product on your site.

This is helpful if you’ve lowered the cost of shipping or need a way to make up for it in other areas.

In this case, let’s say that one of our customers has been using our website for years but only recently started purchasing more frequently, even though their total spending has remained constant over time.

We’d like our LTV (lifetime value) with these customers to be higher because we know they’re really happy with the products we sell them and would like them as long-term customers who return often.

We could increase their LTV by lowering prices across the board so that they don’t feel like they’re paying more than necessary just because they bought something from us before — but what if some products were already priced low enough?

In this scenario it might make sense not only from an LTV perspective but also from an overall profitability standpoint: why should we sacrifice profits by dropping all prices by X% when only one outlier item needs adjusting?

Customer loyalty

customer loyalty

Customer loyalty is the key to success in ecommerce.

If you’re looking for a quick way to increase customer retention, here are some tried and tested tactics that will help:

  • Measure customer satisfaction. Find out how happy your customers are with their shopping experience.
  • Create a loyalty program. Give them something back as they shop with you more often, like discounts on future purchases or rewards points that can be redeemed for discounts on products or services.
  • Improve customer service by responding quickly and effectively when they have questions or concerns about purchases (and don’t forget about returns).

Subscription model

ecommerce ltv

You can also use subscriptions to get recurring revenue from your customers. There are many ways to set up a subscription model:

  • You can offer an introductory price for a period of time (for example, six months) and charge the customer after that. Or you could offer monthly/quarterly/yearly options instead of making them pay once every six months. This allows you to see if they’ll continue using your service over a long period of time before deciding how much to charge them. Plus, it allows you to incentivize their payment by offering discounts on multiple months’ worth of payments made at once!
  • Another way is by charging per item purchased rather than by month or year-long packages—this would be suitable for services like email newsletters where there’s no need for long-term commitments and users don’t want too much repetition in their content stream (think spam).

Personalized marketing campaigns

Personalized marketing campaigns are more effective, but they can be more expensive and time-consuming to run.

One of the biggest benefits of a personalized marketing campaign is that you’re able to segment your audience by a variety of different factors—age, location, gender and interests, for example—and then create specific messaging for each segment.

This kind of personalization allows you to craft a message that resonates with each individual customer based on their unique needs and preferences.

On the other hand, personalized marketing campaigns require more work on behalf of both you and your team because they involve creating multiple versions of messages (or ads) with different calls-to-action.

Additionally, these types of campaigns are usually highly targeted; therefore it may not make sense for every new customer entering your funnel at this stage in their lifecycle as they may not already fit into one particular bucket or another (e.g., someone who visits your site once would never receive one).

Increase customer retention with value-added services

As an ecommerce business owner, you know that customer retention is important.

You want to keep your customers coming back and buying from you again and again—after all, the most valuable customers are those who are engaged in the brand experience.

But what benefits can you offer them that will keep them coming back? Some value-added services that may help with this include:

  • Add-on options: If your store sells physical products, consider adding accessories or additional items that are related to each product—even if it’s a small amount of money. For example, if someone buys a pair of shoes from your store, offer an option to purchase socks for less than $5 (or even free). This makes it more likely they’ll come back for another purchase since they’ve already invested in the brand experience by making their first transaction.
  • Membership programs: Offering memberships gives customers access to exclusive offers and products not available elsewhere because they’re paying a monthly fee rather than just buying things one time at full price each time they need something specific like makeup or cleaning supplies at home

Decreasing churn

Decreasing churn is easier than attracting new customers.

After all, it’s much cheaper and faster to retain existing customers than acquiring new ones.

Plus, increasing LTV means not just increasing your profits but also providing a great user experience for both you and your customers.

Let’s say you run an ecommerce business selling high-end watches online.

You have no way of knowing who the customer is or what kind of watch they like until they buy their first product from you (and even then it may not be clear).

So how can you create value for them? One simple thing would be sending them an email every time there’s a sale on any product in your catalog—a flash sale or even just a discount on one specific item—to make sure they don’t miss out on anything that might interest them down the road.

This type of service shows that not only do we care about our customers as individuals but also help them find what they want when no one else does by offering something more than just selling products at competitive prices

Improving customer retention is easier than attracting new customers and increasing LTV not just increases your profits but also provides a great user experience.

Customer retention is easier to achieve than customer acquisition. This is because it costs less to retain customers than it does to attract new ones.

You can use the following strategies to increase customer retention in ecommerce:

  • Offer value-added services: By offering personalized services, such as providing discounts on future purchases or giving tips on how to use products more effectively, you can increase the likelihood of repeat business and improve customer satisfaction.
  • Offering subscription models: Subscription models are great for ecommerce businesses because they create a steady stream of revenue from recurring payments by customers. This can help you reduce risk and protect yourself from fluctuations in demand, making sure that your business stays profitable even when there’s a downturn in sales or increased competition due
  • Personalized marketing campaigns: Tailoring marketing campaigns based on personal data collected by retailers allows them provide better service and understand their customers better; this leads both sides being satisfied with each other’s actions which increases customer loyalty over time (or rather decreases churn rate).


The most important thing is to keep your customers happy, so they will keep coming back for more.

This means making sure that you have a good product, excellent service and reliable delivery times.

It also means showing them how valuable they are through loyalty programs and promotions like discounts on their next purchase if they recommend someone else who buys from you as well!

More From Barrington Sutherland: Essential Ecommerce SEO Tips and The Best Ecommerce SEO Tools and Software