How to Maximize CLTV for Subscribers and Non-Subscribers
For direct-to-consumer brands running subscription programs, it's tempting to focus solely on subscription metrics. After all, subscriber revenue is predictable, measurable, and often viewed as the holy grail of sustainable growth. But what about the rest of your customers?
In this guest article, our partner Daasity will show you how to maximize customer lifetime value across your entire customer base—both subscribers and non-subscribers.Â
Why Your Subscription Analytics Only Tell Half the Story
Subscription platforms provide valuable insights into your subscriber base and subscription revenue. However, they're not quite showing you the full picture.
A healthy DTC business typically follows the 50/30/20 rule for revenue distribution:Â
- 50% from existing customers (retention)
- 30% from new customers (acquisition)
- 20% from other sources like wholesale or marketplaces.Â
If you're solely focused on subscription analytics, you're missing crucial insights that could lead to growth.
By adopting a more holistic view of your customer base, you can identify powerful revenue-driving opportunities: converting one-time buyers into subscribers, catching early churn signals to save valuable customers, and spotting cross-sell opportunities within your existing customer base.Â
To do all of that, you first need to track the right metrics.
Key Metrics You Need to Track Across All Customers
Let's break down the most important metrics you need to monitor across your customer base:
Customer Lifetime ValueÂ
Customer Lifetime Value (CLTV) measures gross margin per customer (or per cohort) over their lifetime with your brand.
Customer Acquisition Cost
Customer Acquisition Cost (CAC) tells you how much you're spending to acquire each new customer.
CLTV:CAC Ratio
CLTV:CAC ratio looks at the relationship between your brand's Customer Lifetime Value and your Customer Acquisition Cost. You need to factor in SKU Costs, overhead, etc. to make a profit.
A 3:1 ratio is a common benchmark and indicates that your customer acquisition strategy is profitable. If your LTV is lower than CAC (say 1:1.25), that likely means you’re spending more to acquire a customer than you will make from that customer.
Gross Margins Over Time
Gross Margins Over Time show whether your customer relationships become more profitable as they continue to buy from you, factoring in discounts, shipping costs, and customer service expenses.
Once you understand your key metrics, the next step is to segment your customers strategically. By identifying different customer groups and their specific behaviors, you can create targeted strategies (like RFM) that improve CLTV and gross margins over time.
How to Segment Your Customers to Drive Growth
RFM analysis is a powerful segmentation method that evaluates customers based on their Recency (when they last purchased), Frequency (how often they purchase), and Monetary value (how much they spend).
Using RFM, you can segment your customers into distinct groups:
- Single buyers: Customers who've made just one purchase
- Multi-buyers: Those who've made multiple purchases but aren't subscribers
- High-value customers: Your most valuable customers, including loyal subscribers
- Churning multi-buyers: Previously regular customers showing signs of churn
- Churning single buyers: One-time purchasers who haven't returned
- Non-buyers: Those who haven't yet made a purchase
Each group requires a different approach to maximize their lifetime value.Â
When you understand exactly where each customer sits in their journey, you can create targeted strategies that move them toward higher-value segments. This precise targeting is far more effective than treating all non-subscribers as one homogeneous group.
How to Create Personalized Customer Journeys
Let's explore the most effective strategies for each segment:
Single Buyers
After making their first purchase, new customers need nurturing before they're ready for subscription offers. The key is to understand their likely next purchase.
A product affinity analysis can help you understand which products customers commonly buy together or in sequence. Then, you can create targeted email content, partner with relevant influencers, and develop educational materials that build trust while guiding customers toward products they're most likely to want.
Example: Kitchenware brand Sardel discovered that customers who bought non-stick pans were likely to purchase stainless steel cookware next. By using this data to optimize their product recommendations and email flows, Sardel achieved a 20% increase in average order value and a 9% boost in repurchase rates.
Multi-Buyers
These customers have already demonstrated their trust in your brand through repeat purchases, making them prime candidates for subscription conversion.Â
A combination of personalized product recommendations based on their purchase history and strategic subscription offers can show them the value of committing to regular deliveries. The focus here is on convenience and savings, helping them see how a subscription can enhance their existing buying pattern.
Churning Customers
When customers show signs of churning, a multi-channel approach is essential for re-engagement.Â
Targeted advertising with special offers, strategic discount campaigns, and even direct mail can help reconnect with these customers, especially if they've changed their contact information. The goal is to remind them of your brand's value while providing a compelling reason to return.
Tip: Timing plays a crucial role in all these journeys. Understanding the average time between purchases allows you to set up triggered communications that reach customers just as they're likely running low on product.
The Importance of a Data Analytics PlatformÂ
Segmenting and targeting your customers effectively requires the right tools. A data and analytics platform like Daasity provides a holistic view of your entire business, so you can analyze customer segments, track average time between purchases, understand product affinity, and measure the success of your personalization efforts all in one place.Â
This comprehensive approach ensures you're making data-driven decisions that benefit both subscribers and non-subscribers, ultimately maximizing lifetime value across your entire customer base.
Maximize Your CLTV with Daasity
Daasity is the leading analytics platform for direct-to-consumer brands, helping companies build effective customer segmentation strategies, create personalized customer journeys, and drive growth through data-driven insights.Â
To learn more about how Daasity can help you maximize customer lifetime value across your entire customer base, visit our website or book a demo.
SEO
Meta title: How to Maximize CLTV for Subscribers and Non-Subscribers
URL: https://www.loopwork.co/blog/maximize-cltv
Meta description: Maximize customer lifetime value across your entire customer base with these data-driven strategies.
Social Media
We teamed up with our partner @Loop to share actionable strategies for growing CLTV across your entire customer base.
Learn how to:
- Look beyond subscription-only metrics
- Segment customers effectivelyÂ
- Create personalized journeys that convert
One of our customers, @Sardel, used these exact strategies to achieve a 20% increase in AOV and a 9% boost in repurchase rates.
Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.
Travis has 6 years experience in eCommerce & Shopify, strategically working with DTC to enable drive data-driven growth through Daasity. Experienced in CX & data-driven best practices, always thinking about how brands can deliver the best experiences to their customers.
Built for scale.
Dedicated team from day 1
Seamless data transfer
Post-migration support
