Amazon is the most used shopping website in the world. It has a huge selection of products, offers great prices, and has an easy-to-use interface.
When you sell on Amazon, you will benefit from the massive traffic that comes to your product page. But will always struggle to increase the CLTV of your customers as Amazon is known to not provide sellers with any data of their customers, making it very hard to remarket and resell, but there are some strategies that Amazon sellers have been using for years -
What is Customer LTV?
Customer lifetime value is a key metric used by businesses to determine the value of their customers.
When you have a customer, you want to keep them as long as possible. The longer they stay with your company, the more money they spend with you, and the more likely it is that they will recommend your product or service to others.
The formula for calculating customer lifetime value is simple:
((Annual Revenue – Annual Customer Acquisition Cost) / Customer Lifetime) x 100% = Customer Lifetime Value
In other words, if annual revenue minus annual customer acquisition costs equal your average customer lifetime value, divide by 100% and multiply by 1 year. This gives you an estimate of how much money it would take on average for a customer to leave your company.
Use only high CLTV products to promote with PPC ads -
The most effective way to increase customer lifetime value is using only high CLTV products in your PPC ads.
Amazon makes it easy to track the lifetime value of each customer by breaking down their purchase history into several categories:
New Amazon customers - This category includes all new customers who have never purchased from Amazon before.
Repeat buyers - These are customers who have purchased from Amazon at least once before.
Renewal customers - These are customers who have already purchased from Amazon in the past but haven't made any purchases yet.
Using only high CLTV products for your PPC campaigns will ensure that you get a positive ROAS in the long term, this way, you can be more aggressive with your advertisements and spend more in the short term.
Create a custom store on Amazon -
Amazon has now enabled brands to create a full store inside Amazon. The
Stores and Sponsored Brand Ads let you share your value proposition and tell your story to Amazon shoppers.
With a store, you can use strategies to promote products with high customer LTV and create a unique store identity so they keep coming back for more. You can even run ads off of Amazon on Facebook and Instagram and use an Amazon tag to track the return to your Amazon Store.
Offer discounts on high LTV products -
Offering discounts is an amazing way to get initial customers for your brands. Plan on giving discounts on gateway products or high-value products with a large discount so that you get the initial customers and then increase their lifetime value to get your costs back.
To increase CLV, you can run special campaigns tied to a particular season or event and consider temporarily reducing the price of your best-selling items. You can look at special promotions to reward frequent buyers by providing a digital coupon, giving a percentage off or free shipping.
Create product subscriptions and bundles -
If you're FBA-approved, you can add a Subscribe & Save option to your products. This will guarantee repeat purchases. You can check your Subscribe & Save eligibility in Seller Central.
Bundles can help drive up CLV. When thinking about creating a product bundle to sell on Amazon, the first thing to keep in mind is that bundles and multipacks are not the same!
A bundle usually consists of complimentary items sold together as part of a set that typically cost less than purchasing the individual items separately.
For example, if you sell a hair shampoo that comes in six different fragrances, then you should not consider bundling six bottles of each kind together into its package. Instead, bundle 3 Bottles of a specific shampoo and one bottle of conditioner that goes along with the type of shampoo.
When your customer runs out of conditioner, they would want to buy this specific conditioner.
Limit to offering individual conditioners on your website instead of on Amazon. That way, the customer will have to purchase directly from your site when their conditioner runs out because the ones included in the bundle will not last forever.
Increase social media presence -
To increase your CLV, at some stage, an Amazon shopper has to become your customer and not just Amazon's. You can also use social credibility to enhance your site’s value. Similar to any review or testimonial, social proof brings the human voice into your brand experience.
In attracting consumers of today, social media plays a very important role. Use social media not to sell your products but to engage your audience. Whenever someone is about to make a purchase or is shopping for something they want, they look for reviews, recommendations, referrals, and input from others who have used the product or service.
Include exciting discounts, offers and clear CTA's to increase the number of website visits from your social media.
Use First-party data to remarket directly -
Having first-party data of your customers, like their emails, phone numbers, etc, can help you reach them directly and retain them for longer.
But how can you get the first-party data of your Amazon customers without violating Amazon rules?
A QR code-based product registration solution is the newest and the most result-driving method used by new-age brands these days.
How does a product registration software solution help you increase your customer LTV?
Product registration solutions work by having a QR code placed on your product or product packaging. Whenever a customer wants to register for or claim a warranty, access other post-sales services or unlock the complete customer experience, the customer can scan the QR code and get directed to a custom-built web app.
This custom-built page asks the customers for their purchase details along with their data like Names, phone numbers and email ids. This personal data is then used by brands for direct targeting, remarketing and increasing customer LTV.
A benefit of using QR code-based product registration solutions is getting direct access to your customers' data that can then be used to remarket and retain them.
Dyrect has helped Syska, Portronics, FLO, and 100+ leading brand increase their LTV and bring their marketplace customers to their websites. To know more about how a product registration solution can help your brand - Click here.
Ready to get product registration software?
Leading e-commerce brands are using product registration software like Dyrect to collect first-party data and connect with all their customers.
Dyrect has enabled marketing teams of leading brands to access first-party data, with a data acquisition rate as high as 40%. To know how Dyrect's product registration software can help you collect first-party customer data, book a demo with our solution experts here.
