Customer CLV this Holiday Season
It seems like only one (1) year ago we were sitting here on Monday looking down over the cliff of the most wonderful time of year…season’s savings!
It is, without a doubt, one of the best ways to get a large number of new customers to your site and hopefully signed up for your subscriptions.
Most of our Google search histories show something close to what you’re seeing here. People are searching for deals on Black Friday and Cyber Monday and your traffic will increase substantially. In some cases sites were seeing over 100% increases in their traffic from the days leading up to Cyber Week.
With all that traffic, it stands to reason that you’ll get quite a few new signups.
But here’s where things get interesting…what happens next year?
Let’s say you give a discount for your subscription like the one Adobe gave during one of their Cyber Week promotions. As a subscriber to your service, does your customer get the same discount next year? If you provide another discount the following year, will they churn and repurchase at the new discount? How do you retain your holiday consumers while ensuring higher Customer Lifetime Value?
We all remember the book, so here are a few ideas to avoid reduced CLV during the holiday season.
Extend the value!
Most subscriptions renewal annually and the customer is set to renew on the date of the first purchase. In an effort to get those holiday consumers away from that cycle, why not offer an additional six (6) months with the discount. This way, when the customer renews they will be well after the holiday season and less likely to expect the same type of discount.
This will also help to prevent customers from churning early to get the discount as they’d be giving up their free months.
Monthly over Annual!
In most cases the monthly subscriptions are more expensive to the consumer when considering the total cost per year. To avoid a larger yearly discount discounting your monthly version instead.
If you offer $10 per month or $95 per year, you can discount your monthly subscription to $8 per month and still have the opportunity to make the same amount as your annual subscription. This will also make it easier to up-sell them to your annual subscription later, since they’re already used to paying that amount.
As always, the best way to ensure customer lifetime value is by giving them the best possible customer experience. If you communicate your value on a regular basis, when you communicate the cost of your next renewal you’ll have a better chance of getting your customers to renew at the higher price point. Not to mention all the opportunities to up-sell your customers to new and better products.
There are lots of ways to increase CLV even with the expectation of holiday discounts. The important thing is you avoid devaluing your solution in the long term!