How to Increase LTV to Supercharge Your Growth

At Stay Ai, we call LTV the king of all metrics. It’s a great way to track how much money you can expect to receive from customers throughout the lifetime of their engagement with your brand. Increasing LTV can really supercharge your growth because when you scale that increase over 100, 1,000, or 10,000 subscribers, it adds up fast. 

Let’s go through LTV and how you can increase it to supercharge growth for your brand!

Calculating LTV

First things first: how do you know what your LTV is? For subscription brands, we calculate LTV by taking the average number of cycles customers subscribe for and multiplying it by the AOV per cycle. For example, if your average customer subscribes for six cycles and the AOV per cycle is $60, their LTV is $360.

While this standard LTV metric is important for measuring long-term brand growth, it’s also important to consider LTV for shorter timeframes. We like to look at short-term LTV, such as the LTV of customers in their first 3-6 months of subscriptions, to determine the value of cohorts. If you’re using LTV to determine what your customer acquisition cost (CAC) should be, you’ll definitely want these shorter timeframes because they’ll be more accurate in shaping your decision-making.

How to Increase LTV

There are two basic ways to increase LTV: increasing the number of cycles subscribers stay for and increasing the AOV per cycle.

To keep subscribers longer, you can create special perks, rewards, and content that are available only to them and not to non-subscribing customers. These exclusive offerings create added value to being a subscriber, as well as helping them feel like they’re part of an elite group. Keep in mind that early access and special discounts are great, but they don’t drive the engagement that they used to. Try to introduce rewards that will make your subscribers decide it’s worth it to keep their subscription a little longer, such as a unique, limited-edition collaboration or one-of-a-kind merch.

Communication is also key to driving up LTV. The fastest way to lose a subscriber is to make them feel like they were tricked into enrolling or not given important information. If you want subscribers to stay long-term, communicate with them clearly and make them feel valued. Create personalized, fully-branded emails using Stay Ai’s email builder and set up automatic emails that will allow them to swap products if their usual order is out of stock or update their payment info if it fails. Stay Ai’s platform makes it easy to set all of this up in advance so your subscribers have the most important information about their account sent right to their inbox.

As for increasing AOV, there are a lot of ways you can do that! Two of our favorites are cross-sells and upsells. In your Stay Ai portal you can select which products you want to promote to your subscribers, and they can add them to their next subscription order with just the press of a button. By giving your subscribers the opportunity to add additional products to their order, you can bring that order value up in an easy way.

You can also take a look at your product catalog and see if there are opportunities to launch new products or bundle current ones. No matter how great your current offering is, eventually your customers are going to want to see something fresh and exciting. A new product or bundle will give them a reason to look at their subscription and either upgrade to a higher-value product or add it straight to their order.

Increasing your LTV is a great way to supercharge growth for your brand, and at Stay Ai, we’re here to help. Reach out to us and we’ll help you take your brand to the next level!