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In B2B, it’s particularly important to maximize customer lifetimes so you can grow and maintain competitiveness. E-commerce provides many ways to acquire, maintain and retain customers and to create opportunities for long-term relationships. By offering a good customer experience, working with loyalty incentives and adding aftermarket services, e-commerce can improve CLV – Customer Lifetime Value.

If you work in B2B, you know that many parts of the business play an important role. As well as purchasing, planning, design, manufacturing, quality control and financial issues, there’s always a major focus on sales and marketing.

As most of you are fully aware of, the B2B sector often has longer sales processes than traditional commerce as a result of the technical, quality and commercial complexity of each sale. This is one of the most important reasons why, once you’ve gained a customer, you must retain them over time for your business to thrive.

If you succeed at achieving repeat business, it’s likely you’ll increase the total revenue per customer. Focusing on Customer Lifetime Value is the key to success. If you can reduce your customer churn by a few percent – it can have a huge impact on the bottom line.  For example if you can reduce it to only 2.5% annually, you’ll achieve a 50% increase in sales over five years compared to a company that has an annual 5% customer loss. That is the effect a solid Customer Lifetime Value program can have on your business.


Customer Lifetime Value explained

Customer Lifetime Value is the sum of all costs to acquire a new customer (in other words, the costs of marketing and sales) and the costs to retain a customer (loyalty discounts, free maintenance, guarantees etc.) compared to the total revenue each customer gives over time.

When you look at the net sum of your customer’s value over time (including average order value, purchase frequency and customer lifetime), minus the costs for customer acquisition and maintenance, you get the Customer Lifetime Value (CLV).

In B2B marketing, you know that the cost of acquiring new customers can be very high. Sales cycles are long and often several people are involved in the purchase. Above all, more people need to be involved in quotes, price negotiations and quality controls. If you look at the overall cost structure of all of these activities and commitment from both sides, you’ll realize that it’s just as important – if not more important – to maintain existing customers than to acquire new ones.

The major benefits of increased CLV

1. Reduced costs for marketing and sales

The cost of marketing B2B products can be high, with frequent contact interfaces and interactions with the customers. In the same way, sales is an energy-intensive area. When you focus on the customers you have and CLV, you gain strategies both for retaining your existing customers and for finding new ones to sell to. This allows you to reduce your costs for marketing and sales.

2. Improve the chances of repeat business

Regular repeat purchases often represent less effort on your side, but they also provide a guaranteed constant revenue stream over a particular period. Indirectly, this helps strengthen your position on the market. You will acquire a reputation as a good supplier.

3. Stay one step ahead of your competitors

By focusing on CLV, you stay a step ahead of your competitors by gradually increasing your market share. When you focus on retaining your existing customers and increase their commitment, they become loyal to you. This puts you in an advantageous position over your competitors. By retaining existing customers over time, sales increase rather than reducing when you lose customers. As mentioned above, if you succeed in reducing your customer loss to only 2.5% annually, you’ll achieve a 50% increase in sales over five years compared to a company that has an annual 5% customer loss.

4. Increased sales through positive customer reviews

There’s nothing better than a positive customer review regarding the quality of your products and services. When you focus on CLV, you’ll probably retain your customers over time, which helps you build a good reputation, get positive recommendations and thus be able to sell more.

You’ll discover that there are many ways to maximize CLV, but one of the most reliable is to offer the customers a more seamless buying experience. The buying journey should be intuitive, quick, supported across a number of channels, give intelligent choices and make self-service possible.

Many B2B companies and salespeople have switched parts of their sales to an e-commerce solution in an initial phase. In a second phase they have then expanded the solution to a targeted customer portal with a higher degree of customized content and self-service.

Customer-centric e-commerce solutions and customer portals can help you in these ways:

Use customer data to target content

To get insights into how you can improve the customer experience and thus retain your customers, you need to find out how the customer interacts with you via different channels. How do the customers consume content and carry out transactions? Collect data along the way and use these insights to target content that helps the customer make the right buying decision.

Customize your communication with the customer

Use customer data to create a user experience that builds on good communication. You can help your customer feel seen and understood by using personal communication that talks directly to them instead of mass communication that may be completely irrelevant.

Exploit all channels

With an e-commerce platform, you’ll be able to exploit all channels in the buying process. It will also support your aftermarket processes. Offering the customer the opportunity to choose the channels they are comfortable with, rather than forcing them to carry out certain functions in particular channels, increases the likelihood that you will retain them for longer.

Offer your customers more self-service

More and more people are accustomed to modern web interfaces and prefer to use fast self-service options. Consequently, self-service functionality is becoming increasingly popular. By offering your customers increased opportunities for self-service, you can enhance the customer experience and improve CLV.

Get your customers into a loyalty program

Loyalty programs with preferential treatment, discounts and better service are ways to add value to the customer and consequently to retain them for longer. With a customer-focused portal, the customer always has access to up-to-date, relevant information in the right channel, leading to increased loyalty. You can also create a positive dependency effect. You offer something the customer doesn’t want to be without, and it reduces the risk of them changing supplier.


How to focus on Customer Lifetime Value:

  • Review the information, campaigns, services and purchase options that you currently offer your customers. Try to group them by popularity and internal time spent on maintenance.
  • Identify all the customer data collected by different systems and consolidate, clean and enhance it in a central place so you can get a unified image of the customer. Analyze and understand which of your customers are profitable over time. From here you can build more detailed segments and communicate with customers individually.
  • Collect feedback from your customers and customer-focused teams about areas for improvement.
  • Prioritize and evaluate the different options for facilitating a better customer experience.
  • Identify whether you have the right solution for your e-commerce/customer portal so you can expand and develop more self-service options. In this way you can try to improve the customer experience, and increase customer loyalty and lifetime value.
  • Measure, analyse, test… Repeat.

It’s a marathon, not a sprint. Start small and build knowledge. As you grow, you should create a team that focuses on growing and increasing your CLV over time.

If you have any questions about how you can increase your own Customer Lifetime Value, we’d love to hear from you!

Learn more about customer portals in our webinar series

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