3 Steps for Increasing Customer Lifetime Value

There are many different strategies for measuring the value of your customers both individually and collectively. While collective measurements like Average Revenue Per Customer (ARPC) can offer you a holistic view of your entire customer base, it can often be misleading. ARPC can become significantly skewed by the presence of a few big-spenders.

By looking instead at Customer Lifetime Value, you can get a better sense of your best customers. Identifying these best customers, and then dividing the rest of your customer base into segments based on their own unique values, can offer an enormous opportunity for you to increase those values over time.

Following are three steps for Increasing Customer Lifetime Value


The first step to increasing the lifetime value of your customers is to know who they are and what patterns they fall into. Digging into your customer database, you need to create customer segments based on the buying patterns of your customers. Review transaction values, the length of customer relationships with your brand, their responsiveness to your marketing. Do they open your marketing emails? What’s their average transaction size?

Your marketing outreach will be most successful when your customer segments match customer characteristics most important to your brand.


In tandem with creating customer segments, we need to determine the particular value of each segment to understand where marketing resources are best spent. Targeting requires not only the weighing in value of each customer segment (profitability, propensity to purchase) but also understanding which medium that segment prefers. Are your most profitable customers most responsive to direct mail or email?

Offer Optimization

With an understanding of who your customers are, how they like to be contacted and how valuable they are, you can then create an offer optimization strategy. This strategy combines the insights of segmentation and targeting with the best, most persuasive offers for each customer segment. These offers aren’t necessarily discounts, though many times they are. Sometimes the best offers are supplementary to other purchases, or based on needs you have identified for a particular segment. 

By optimizing offers for each of your targeted customer segments, you can improve the conversion rates for your best customers and increase their engagement and purchases. With each successful offer, you incrementally increase the lifetime value of that customer.

Category: offer optimization, Marketing, segmentation, targeting

Amanda Wojtalik

Amanda Wojtalik

A seasoned marketing professional, Amanda Wojtalik brings experience in omnichannel marketing and communications to craft and curate content for Pluris Marketing.

About this blog

At Pluris, we believe that we all can do a better, more efficient job at marketing to our most important customers. On this blog, we'll discuss how strategy, database management, offer optimization and analytics can help us all be better marketers. Sometimes, we may just talk about sports.

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