10 Proven Ways to Increase the Value of a CustomerIf you’re looking to make more money through your website or blog by selling products, there are a few basic options:

1. Find new customers and make more sales.
2. Increase your prices and make the same number of sales.
3. Increase the value of the customers that you already have.

When it comes to selling products online, finding ways to reach new customers and to make more sales is often the focus. While there is certainly nothing wrong with making more sales and getting more customers, increasing the value of your customers can be an equally effective method.

In this article we’ll take a look at 10 different things you can do to increase the value of your customers. The article is written from the perspective of a small business or individual entrepreneur who is selling digital products, but many of the principles can apply to businesses of all types and sizes.

1. Offer Quality Products and Customer Service

First things first. In order to get more value out of your customers you will need to strive to offer a very high level of quality in your products, as well as to provide excellent customer service.

If a customer purchases one of your products and has a bad experience either with the product itself or with the customer service received, that customer is highly unlikely to make another purchase from you in the future.

To the contrary, a customer that loves the quality of your product and the customer service that you offer is very likely to purchase from you again in the future.

The quality of your products and the customer service that you provide will impact every effort that you make to increase the value of your customers. Make the quality or products and service the utmost priority and you’ll see the rewards.

2. Create Brand Loyalty

All of us demonstrate some type of brand loyalty in our lives. Some typical examples include:

  1. Buying groceries based on brand
  2. Going to the same restaurants over and over again
  3. Buying multiple cars from the same maker
  4. Choosing clothing by brand
  5. Checking a favorite TV channel to see what is on

In some cases brand loyalty will impact decisions on a subconscious basis (reaching for a name brand product without even thinking about the other competing brands).

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Brand loyalty isn’t something that only exists in the world of large retail stores and physical products. If you’re selling any type of product online you can benefit tremendously by creating brand loyalty with your customers. It’s not easy to do and will take time, but it should be a priority for anyone with a long-term focus.

The first point about quality of the product and customer service will, of course, have a huge impact on brand loyalty. Customers tend to be loyal to brands because of confidence in the quality.

3. Solicit Referrals

Increasing the value of a customer doesn’t necessarily require that customer to spend more money with your company. The value of a customer can also be increased if he or she is telling others about your products and leading to more sales.

Referrals are extremely powerful because consumers tend to trust the recommendation of a friend, family member, or colleague more than they would trust an advertisement. If your satisfied customers are spreading the word about your products it can make each of those customers more valuable.

There are a few things you can put into practice when it comes to soliciting referrals. First, collect and keep track of any positive feedback that you receive from customers. Adding testimonials to your website, and specifically to your product pages, is a great way to encourage visitors to try your products. If someone sends you an email with a statement about how your product has helped them, ask the customer if you can use the statement as a testimonial in your marketing efforts.

Email is not the only way to collect testimonials. Pay attention to messages from your customers at Twitter and Facebook as well. And whenever you add someone’s testimonial to your site, share the link with them and they may want to share it through their social profiles as well.

One important practice when it comes to referrals is to ask for what you want. Many of your satisfied customers will be happy to tell others about your products, but they may not even think of it. If you ask for referrals you are far more likely to get them. You can specifically ask your customers to use social media for referrals, you can ask them to forward your promotional emails to their friends, or you could even set up some sort of contest or referral program that rewards them for sharing a recommendation (using something like Contest Domination). And of course, good old fashioned word of mouth still works too.

You may also want to encourage your customers to join your affiliate program to recommend your products. This will allow them to make some money from their referrals, which of course is great for added incentive. This approach will work best with your customers that have their own website or blog, but affiliate links can even be used through social media and email (hopefully with spam-free methods), so just about anyone can be a potential affiliate.

4. Upsells

One common approach to increasing the value of customers is to make use of upsells. With an upsell you would make an additional offer to your customers immediately after a purchase. For example, you could sell an e-book, and then immediately following that purchase forward the customer to a landing page where you offer access to an exclusive webinar training on a related topic. In many cases the first product is priced low to attract as many customers as possible, and then the upsell is priced higher to maximize revenue.

This can be an effective approach because you know that the customer is interested in your upsell based on the fact that they purchased your first product. Also, they already have their credit card out and are in buying mode. As a word of caution, upsells can at times be a turn off to customers, especially if they are done too aggressively or with too many upsells (sometimes several levels of upsells are included).

The upsell doesn’t have to come immediately after the first purchase, although that is common. You could also make the same offer at some time well after the purchase. Using the same example, if you sell an e-book you should have an email list of customers who have purchased that e-book. At some point in the future you may want to offer the webinar training on a related topic, and you could email your list of customers with an offer on the training.

5. Offer a Membership Option

This option isn’t used all that often, but it is one of my personal favorites. I’ve used this approach on a few of my websites and have found it to be a great way to drastically increase the value of customers and to increase revenue.

In order for this to work you’ll need to offer multiple products, and ideally you’ll also be releasing new products periodically. The idea is that you will offer a membership option that will give customers access to all of your products instead of simply purchasing a single product. If the deal is right, it will make more sense for many customers to purchase the higher-priced membership.

Let’s take a look at a real-world example. Smashing Magazine is a popular blog in the web design industry. One of the ways that they make money is through book sales. They have a number of books on different topics that can be purchased individually as e-books or physical books. Then they also offer an annual subscription to their library that gives access to all of their e-books, including 24 new books per year. That annual subscription no doubt encourages many customers to pay more in order to access to all of their books, and the result for Smashing Magazine is more revenue because of the higher price of the subscription as compared to the price of one book.

Membership also has potential to increase the value of a customer even further when you consider recurring payments. Not all membership models involve recurring payments, but those that do can be great for increasing revenue on an on-going basis in a way that can have a snowball effect.

Membership can be a little bit tricky to set up, but fortunately there are an increasing number of options that set out to make it pretty easy. For WordPress users one unique option is Cart66. While there are many e-commerce plugins to choose from, Cart66 is rather unique because it also includes built in membership functionality so you could process individual payments, recurring payments, and handle memberships with one system.

Another option for WordPress users is Member Mouse. Member Mouse is a feature-rich membership plugin, but it also includes functionality that allows you to make one-off sales that don’t involve membership or recurring payments.

Other providers like DPD and SendOwl both allow you to sell individual products as well as subscriptions.

If membership isn’t something that you want to offer, another somewhat similar option is to offer product bundles. Sticking with the example of e-books, you could package several related e-books together and offer them in a bundle that would be a great value for customers and would result in higher revenue for you. If a customer is considering purchasing an e-book, he or she may just decide it would be a better value to purchase the bundle that includes the e-book and also a few others.

6. Offer Discounts on Large Purchases

If you want to encourage larger purchases, consider giving customers some added incentive by offering a discount. It’s not uncommon to see offers where the customer can save 20% on purchases over $100, or something similar.

Another way that this is used effectively is to encourage upfront purchases. For example, HostGator‘s web hosting prices are influenced by what you want to pay up front. The normal plan is billed monthly, but if you pay for 6 months up front you’ll get a nice discount. Paying up front for 1, 2, or even 3 years will give you even bigger discounts. This type of approach is very common for any product or service that involves recurring payments. The result is more money up front for the seller, and customers who are more likely to stay with the company rather than leaving after a few months.

HostGator

7. Set Up a Rewards or Loyalty Program

Rewarding repeat customers is another great way to encourage additional purchases. There are examples of this approach in all different industries. Grocery stores that offer discounts to users that scan their loyalty cards, coffee shops that give a free drink after 10 purchases, and gas stations that offer discounts if you use their credit card are just a few common examples that many of us see in everyday life.

The same concept can also be applied to encourage customers to make more purchases from your website. The specific details of what customers can earn will vary depending on your site, but as long as they have something of value to gain there will be some added incentive for them to purchase more.

The details and possibility of setting up a rewards or loyalty program will depend on the e-commerce platform that you are using. For example, the popular hosted platform Shopify has an add-on called Promotify that allows you to set up one of these programs. BigCommerce users can take advantage of the S Loyalty add-on.

8. Partner with Companies that Sell Complementary Products

Another approach that I think is under utilized is partnering with companies that sell complementary, but non-competing, products. Two companies or entrepreneurs with similar audiences can partner to promote each other’s products. This could be on an affiliate basis where you would make money depending on how many sales you refer, or it could be an arrangement where you each promote each other’s product and you each benefit by getting some extra sales.

An example of this would be a WordPress theme seller and a WordPress plugin seller promoting each other’s products to their customers. The products don’t directly compete with each other, but they do appeal to the same audience so it would be a natural fit.

To find potential partners you can start by evaluating your target audience. What other types of products and services do they buy aside from the ones that you are offering? Look for companies whose products or services you have used yourself that you would feel comfortable recommending to your customers. If they don’t sell any products or services that compete with your products, they may be interested in a partnership that would provide some added exposure and a recommendation to your customers.

These recommendations can be made either directly on your website, or you can email your customer list. An example of the first approach, Photocrati is a popular WordPress theme for creating photography websites. Naturally, their customers will also need web hosting for their websites. Photocrati’s homepage includes a link to this page where they recommend a few different web hosts. Most of the hosting links are affiliate links, so they are compensated for referrals. Depending on how much they are being paid per referral, they can double (or more) their revenue from a single customer if that customer purchases hosting through their affiliate link in addition to purchasing their theme.

If you can recommend complementary products to your customers and earn some affiliate revenue from those recommendations, the value of those customers has increased.

9. Offer Exclusive Discounts to Customers

Many companies effectively use discounts for their existing customers in order to encourage more purchases. I think we’ve all purchased products from companies who send periodic offers by email.

In some cases these offers may even be exclusive to customers and not promoted publicly, such as a coupon code that is emailed only to existing customers. The sense of exclusivity can be very powerful in the psychology of sales.

If you have an email list, and you absolutely should, it is very simple to put this method to use. All you have to do is create your offer and send it to your customer list. For the best results you can segment your list based on the products that customers have already purchased, and make new offers that are highly relevant and attractive based on those past purchases.

10. Develop a Relationship with Customers

Increasing the amount of money that your customers spend at your website can be aided by developing a relationship with those customers. Of course, you may not be able to develop personal relationships and have one-on-one communication with all of your customers, but with an active presence at major social networks like Twitter, Facebook, Pinterest, and Google+ you can go a long way.

Email lists can also be effective for developing relationships if you use your emails carefully. If you’re only sending offers or sales emails, building a relationship through email is more difficult. But if you use your email list to send helpful tips and suggestions or other useful information, building a relationship through email is possible.

When customers feel more connected to you they are more likely to have that customer loyalty that we looked at earlier in this article, and more likely to purchase from you again in the future.

What’s Your Experience?

If you have suggestions or tips that you want to share, please feel free to leave a comment.