In the world of ecommerce, there's a metric that the largest brands keep a close eye on: Average Revenue Per Customer (ARPC). But what exactly is ARPC, and why should it matter to your online store?
Simply put, Average Revenue Per Customer is the total revenue generated divided by the number of customers over a specific period. It's a powerful indicator of how much value each customer brings to your business. Think of it as the pulse of your ecommerce operation - a healthy ARPC often signals a thriving business.
For starters, it's directly tied to your bottom line. Boosting your ARPC means you're gaining more value out of your existing customer base. In the current ecommerce landscape, where customer acquisition costs can be steep, this is like finding gold in your own backyard.
But there's more to it. Average Revenue Per Customer is also intimately linked with another vital metric: Customer Lifetime Value (LTV). While ARPC gives you a snapshot of current performance, LTV projects the total value a customer will bring over their entire relationship with your brand. By focusing on increasing your Average Revenue Per Customer, you're effectively laying the groundwork for a higher LTV.
In today's competitive ecommerce landscape, where standing out is tougher than ever, improving your Average Revenue Per Customer isn't just smart - it's essential. It's about making every customer interaction count, turning casual shoppers into brand advocates, and ultimately, driving sustainable growth for your online store.
The following article will cover 5 tried and tested strategies that can help you boost your brand's Average Revenue Per Customer and set your ecommerce brand on the path to long-term success.
Upselling and cross selling are time-tested strategies for increasing your Average Revenue Per Customer. When done right, they not only boost your revenue but also enhance the customer experience by introducing them to relevant products they might love.
Tools like LTV.ai can help here as well by using AI to ingest and learn from historical customer data, ensuring that each one of your customers gets the exact product they need, exactly when they need it based off factors like their physical location, previously purchased product, feedback etc.
The key is relevance. Your upsell and cross-sell offers should feel helpful, not pushy. When customers feel you're genuinely trying to enhance their experience, they're more likely to increase their spend, boosting your Average Revenue Per Customer and customer LTV.
In today's ecommerce landscape, personalization is quickly becoming a necessity to stand out and truly connect with your customers. The goal is to offer an individualized experience that can dramatically impact your Average Revenue Per Customer.
Personalization uses customer data to deliver more relevant communication and experiences. It goes beyond basic segmentation to tailor content based on factors like purchase history, browsing behavior, and demographic information.
Benefits include:
How to implement personalization:
The impact of personalization:
For brands looking to take personalization to the next level, tools like LTV.ai offer true 1-1 hyper-personalization capabilities, resulting in your brand talking to each customer as an individual in an email that isn't heavily branded and instantly ignored.
This AI-driven approach creates truly 1-to-1 experiences by:
Brands using LTV.ai for hyper-personalization have seen up to 25% increase in email-driven revenue, along with significant improvements in customer engagement and retention.
By leveraging personalization (and potentially hyper-personalization), you're not just improving your Average Revenue Per Customer - you're creating a more satisfying shopping experience that keeps customers coming back, driving long-term growth for your ecommerce business.
Sometimes customers drift away, but that doesn't mean they're gone forever. A well-crafted win-back strategy can re-engage lapsed customers, boosting your Average Revenue Per Customer and extending customer lifetime value (LTV).
One of the most efficient win-back campaign's in the industry is LTV.ai's lapsed customer win-back flow.
It's a sequence of 5 emails coming from a "brand ambassador" who is nurturing your customers back into the fold, through 1-1 AI driven, hyper-personalized emails, that reference each customers individual location, give them reasons to make their next purchase, gather genuine feedback (as opposed to cold surveys) and ultimately re-engage your lapsed customers.
One of LTV.ai's most recent win-back campaigns on customers that haven't purchased in 6-18 months with a leading menswear brand, Ministry of Supply, resulted in a Average Revenue Per Lapsed Customer of $0.91. Full case study here.
Product bundles are a smart way to increase your Average Revenue Per Customer while providing value to your shoppers. When done right, bundles can boost sales and introduce customers to new products they might love.
Remember, the goal is to create bundles that feel like a great deal for the customer while increasing your Average Revenue Per Customer. When customers feel they're getting more value, they're more likely to choose a bundle over individual items.
Loyalty programs are an efficient tool for increasing your Average Revenue Per Customer. They're not just about rewarding customers but about creating a cycle of repeat purchases that can significantly impact your bottom line.
The key is to create a program that aligns with your brand and offers genuine value to your customers. Remember, a well-executed loyalty program can turn occasional shoppers into brand advocates, driving up your Average Revenue Per Customer in the process.
Improving your Average Revenue Per Customer isn't just about making more money in the short term - it's about building a sustainable, profitable ecommerce business for the long haul. Let's recap the five strategies we've explored
Each of these strategies contributes to boosting your Average Revenue Per Customer, but their impact goes even further. By focusing on these areas, you're not just increasing immediate revenue - you're laying the groundwork for higher customer lifetime value (LTV).
Remember, in the world of ecommerce, it's not just about acquiring new customers - it's about maximizing the value of each customer relationship. By implementing these strategies, you're creating a better shopping experience, fostering loyalty, and ultimately building a stronger, more profitable brand.