How Can You Increase Customer Lifetime Value?

A Complete Guide for SaaS Companies

Customer lifetime value (CLV) is a crucial metric for any SaaS company, and understanding how to increase it is essential for long-term success.

While you can use many strategies and tactics to improve customer lifetime value, some are more effective than others.

In this article, we'll discuss these strategies in detail so you can take actionable steps to maximize your CLV. 

With the right approach and dedication from your team, you can ensure that every customer makes a lasting impact on your bottom line.

What Is Customer Lifetime Value, Exactly?

At its core, customer lifetime value is a calculation of the total revenue a company can expect from a single customer over the entire duration of its relationship.

Several vital factors feed into this calculation, including average monthly revenue per customer (ARPU), customer retention rate, average customer lifespan, and more.

While it might seem like a simple equation on paper, many nuances can impact the final value. 

Here, we'll explore some of these strategies in more detail.

1. Upsells and Cross-sells

One of the most effective ways to increase customer lifetime value is to encourage existing customers to purchase additional products and services.

This starts with providing a solid onboarding experience that communicates the value of your core offering and any additional features or products that your customers might be interested in.

Then, make it easy for customers to upgrade or purchase additional products and services. 

You can offer an upsell or cross-sell on your website, in your product interface, and during customer support interactions.

There are different types of upsells and cross-sells that you can implement, depending on what's most relevant for your business.

Some of them include the following:

  • Transactional upsells: Offering additional products or services as part of the checkout process for a customer's initial purchase.
  • Product feature upsells: Offering additional features or premium versions of your core product, such as a paid upgrade or subscription.
  • Value-added cross-sells: Offering complementary products or services related to your core offerings, such as access to an online community or educational materials.

Also, you can mix and match these different types of upsells and cross-sells to create a cohesive customer experience that drives lasting value for your business.

2. Feature Adoption and Usage Optimization

Another critical strategy for increasing customer lifetime value is optimizing the usage and adoption of your product's features and capabilities.

One of the best ways to do this is by developing a detailed onboarding process that guides new customers through your product's different features and capabilities.

Another great way to achieve this is by providing in-app tutorials. 

Video demos and help content that customers can refer to as they become more familiar with your product work great too.

Additionally, you can use data analytics tools and customer behavior tracking software, such as Google Analytics and product analytics tools.

These tools will help you better understand how your customers use your product's features and capabilities.

This can help you to identify and implement changes that will drive more value for your customers, such as:

  • Simplifying the product interface
  • Adding new features
  • Releasing a feature upgrade

Overall, there are many things you can do to improve customer adoption and usage of your product.

Some ideas might include the following:

  • Identifying and removing product barriers preventing customers from accessing certain features or capabilities.
  • Developing user onboarding programs that provide a more guided experience and gamified challenges and rewards to encourage engagement.
  • Conducting regular customer surveys or usability studies to gather feedback and identify opportunities for improvement.

Optimizing your product's features and capabilities can drive more value for your customers and increase your lifetime value.

3. Customer Retention and Re-engagement Campaigns

Another critical strategy for increasing customer lifetime value is to focus on customer retention and re-engagement.

One of the best ways to do this is by creating targeted retention campaigns to help minimize customer churn and drive product adoption and feature usage over time.

Some great retention campaigns that have been shown to be effective include:

  • Offering incentives or rewards to customers that encourage them to use your product more often, such as with a subscription credit or discount.
  • Sending personalized product recommendations to customers based on their past activity, such as emails with targeted product suggestions based on their usage history.
  • Running email re-engagement campaigns that target dormant customers and encourage them to come back with special offers or other incentives.
  • Utilizing customer service channels, such as live chat and social media, to support and assist customers struggling with your product.

4. Optimizing the Customer Journey

Finally, optimizing your entire customer journey is one of the most important things you can do to increase customer lifetime value.

This includes understanding customers' various touchpoints with your business and using data-driven insights to identify areas for improvement.

You might use customer analytics tools to track your customers' journey as they move through your product. 

You might also identify areas where engagement drops off or customers need help with specific features.

Then, you can work to optimize these areas by:

  • Modifying your product interface
  • Implementing new onboarding or help content
  • Developing targeted marketing campaigns that are focused on driving product adoption and usage

Optimizing the entire customer journey can help ensure that customers get the most value out of your product, which can impact their overall CLV over time.


Customer lifetime value is a crucial metric for any SaaS company. You must understand the various strategies and tactics you can use to improve it.

It comes down to understanding your customers and their needs and identifying the right strategies to drive product engagement, adoption, and usage over time. 

You can start by:

  • Improving user onboarding
  • Optimizing your product interface
  • Developing customer retention and re-engagement campaigns
  • Improving the customer journey

The key is to take actionable steps that can help you to increase your CLV.

To drive more value and success for your SaaS business, focusing on customer lifetime value is a great place to start.


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