How to Increase Your CLV Through Building a Trustworthy Brand
Increasing customer lifetime value (CLV) is crucial for sustained business growth, and building a trustworthy brand is key to achieving good CLV. When customers trust a brand, they naturally share their positive experiences with friends, family, and on social media, amplifying word-of-mouth marketing. This organic promotion helps build a loyal customer base that consistently supports the brand.
In a market where many brands offer similar products, the ones that provide the best service and establish strong trust with their customers often come out on top even if their products are slightly more expensive. Trust leads to higher CLV because satisfied customers are more likely to return and make repeat purchases.
Trust in the Direct-to-Consumer (DTC) space affects customer engagement and directly influences their lifetime value. Building trust requires delivering excellent customer service, ensuring smooth processes, and providing high-quality products from the outset. Focusing on these areas helps create a loyal customer base that prefers your brand over competitors.
This article discusses proven methods for increasing CLV and provides hands-on strategies brands can implement today to increase customer lifetime value and, ultimately, drive sales.
The Evolution of The Perception of Brand Trust
The perception of brand trust has changed significantly due to digital transformation and increased online competition. Today, consumers have numerous options for almost every product. This makes it challenging for brands to stand out and get noticed.
To attract customers, brands need a strong value proposition and a unique differentiator. Once customers are interested, brands can begin to build trust and relationships.
The good news is that digital advancements have made it easier for brands to create a space where customers feel heard. Tools like AI-powered customer service allow brands to provide quick, automated support, answering customer questions and solving problems more efficiently.
Companies can use AI to handle common inquiries, and then follow up with human support when needed. This approach helps build trust without requiring a 24/7 customer service team.
Brands that effectively resolve customer issues tend to thrive. Customers appreciate the efforts to make things right. Even if the initial purchase has problems, a well-handled resolution can build strong trust and loyalty.
For example, Spark Paws, a premium pet product company, has implemented a customer-friendly policy for first-time purchases. If a customer orders the wrong size, the company not only sends a replacement in the correct size for free but also encourages the customer to donate the original item to a dog shelter. While this policy is exclusive to the first purchase, it showcases Spark Paws’ commitment to customer satisfaction and social responsibility, helping to build trust and encouraging repeat purchases.
Transparency and Authenticity
Transparency and authenticity help brands stand out in a crowded market and create strong, lasting relationships with their customers.
One of the best examples of transparency and authenticity is Chewy, the dog food brand. In just one example, a customer once needed to cancel their dog food subscription because their dog had passed away. Instead of charging a cancellation fee, Chewy told the customer to donate the food to a shelter and sent a custom painting of the dog as a memorial. This act showed that Chewy is run by real people who care about their customers. This story, which went viral, likely gained them thousands of loyal customers who appreciate supporting a genuine brand.
People want to feel that their money is going to a good cause and that the brand they support has real values and cares about them. When customers see that a brand is honest and authentic, they are more likely to choose it over a competitor, even if it means paying a bit more. They want to believe that they are doing something good by supporting a brand that cares.
Being transparent about policies, product quality, and business practices also plays a significant role. When brands openly communicate with their customers, they build a sense of trust that leads to higher customer retention and loyalty. Customers who feel they can trust a brand are more likely to return, make repeat purchases, and recommend the brand to others, all of which contribute to a higher CLV.
By being honest, caring, and responsive, brands can create strong bonds with their customers, leading to greater loyalty, repeat business, and positive word-of-mouth.
Quality and Consistency
When customers know they can rely on a brand to deliver high-quality products every time they make a purchase, they are more likely to become repeat customers. This reliability is a key factor in fostering loyalty and ensuring that customers keep coming back.
Consumers want to feel confident that their money is well-spent. If they experience consistent quality, they trust the brand more. However, if they encounter issues repeatedly, they will likely switch to a competitor.
Brands typically only get one chance to solve a customer’s problem satisfactorily. If a customer has to deal with multiple issues, they will look elsewhere to have their needs met.
Apple is a prime example of a brand that maintains high standards of quality and consistency, which has positively impacted its relationship with customers.
A significant number of Americans own Apple products, and many people are loyal to the brand, eagerly anticipating new releases. This strong loyalty can be attributed to Apple’s consistent delivery of reliable, high-quality products.
Apple products are known for being easy to use, durable, and backed by excellent customer support. If an Apple product malfunctions, customers can visit an Apple Store for one-on-one support, often receiving free or discounted repairs.
This level of service reinforces customer trust and loyalty, leading to higher CLV. People are willing to pay premium prices for Apple products because they know they are getting a product that meets high standards.
Personalization as a Trust Builder
Customers feel heard and valued when a brand understands and caters to their specific preferences. This personalized interaction enhances trust, leading to greater customer loyalty and repeat business.
According to McKinsey & Co, 71% of consumers expect companies to provide personalized interactions, highlighting the importance of personalization in standing out from the competition. Brands that meet this expectation can gain a significant advantage, as customers are more likely to choose them over competitors who offer generic experiences.
Personalizing the shopping experience can be achieved through various tools and technologies. For instance, platforms like Rebuy help brands tailor recommendations based on individual customer behavior.
When a brand suggests products with messages like “because you bought X, we think you might like Y,” it demonstrates an understanding of the customer’s preferences. Even if this recommendation is generated by AI, the personalized touch makes the customer feel understood, building trust in the brand’s judgment.
An example of effective personalization is when a brand offers customized email subscriptions. Instead of forcing customers to unsubscribe from all communications, brands can let customers choose which types of emails they want to receive. This approach helps retain customer engagement and shows that the brand respects their preferences.
Moreover, simple strategies like offering additional products with free shipping right after purchase not only increase the order value but also make the customer feel they are getting a better deal, further building trust and satisfaction.
Responsive and Reliable Customer Support
Responsive and reliable customer support lets customers know they can rely on a brand to address their issues promptly and effectively, allowing them to develop a deeper trust in the brand, which leads to increased loyalty and higher customer lifetime value.
When customers reach out for support, they expect quick and effective solutions. Providing timely responses not only addresses their immediate needs but also fosters a sense of trust and reliability.
Personalized support is another crucial element of building CLV. Tailoring responses and solutions to individual customer needs creates an emotional connection, making customers feel understood and appreciated.
One of the key aspects of customer support is the ability to hear customers, make necessary adjustments, and resolve problems satisfactorily. In fact, resolving an issue to the customer’s satisfaction can sometimes build more loyalty than if there had never been a problem in the first place. Resolving an issue well shows customers that the brand values their experience and is committed to making things right.
If a customer receives a faulty product but the brand’s customer support team quickly acknowledges the issue, offers a replacement, and perhaps even provides a discount on the next purchase, the customer is likely to feel valued and cared for. This positive experience can turn a potentially negative situation into a loyal customer who praises the brand publicly.
This approach helps brands stand out in a competitive market and grow through positive word-of-mouth and loyal customer advocacy.
Building a Community Around Your Brand
Creating a sense of community among your customers is a powerful way to strengthen brand trust and make customers more likely to remain loyal, make repeat purchases, and advocate for the brand to others.
Research suggests that companies with a strong sense of community among their customers experience significantly higher revenue growth rates than those without such communities. This is because people are naturally inclined to operate within communities and feel a part of something greater. When customers hear others like them sharing positive experiences with a product, it reinforces their own loyalty and purchasing habits.
Building a community helps customers feel connected not just to the brand, but also to other customers who share similar interests and experiences. This social connection can make customers more inclined to stick with a brand because leaving the brand means losing the community they value. It’s similar to living in a neighborhood you love; you’re less likely to move away if you have strong ties to your neighbors and local activities.
For example, brands like TELETIES have successfully built a community around their products through social media. They use hashtags like #teletribe, encouraging customers to share their experiences and product uses. The brand then reposts this user-generated content, fostering a sense of belonging and recognition among its customers.
Another effective method is through Facebook groups or community pages. Some brands create groups where customers can share their experiences, ask questions, and receive direct interaction from the brand’s founders or representatives.
These groups can become very active, with thousands of members engaging regularly. Brands can further incentivize participation by offering exclusive deals or early access to sales for community members.
Utilizing Social Proof and User-Generated Content
Social proof leverages the idea that people are influenced by the actions and opinions of others. When potential customers see others positively engaging with a product, it validates the product’s quality and effectiveness.
This validation is particularly compelling when it comes from people who are similar to the potential customer. Taglines like “real people, real results” are effective because they demonstrate that the product works for everyday users, not just through polished marketing campaigns.
User-generated content (UGC) adds another layer of credibility. When customers share their own photos, videos, and reviews of a product, it provides authentic insights into how the product performs in real life. This type of content is perceived as more trustworthy than traditional advertising because it comes from unbiased users rather than the brand itself.
Brands can amplify the impact of social proof and UGC by encouraging customers to share their experiences and by prominently featuring this content on their websites and social media channels. For example, brands can create hashtags for customers to use, making it easy to gather and share UGC.
Reposting customer content on the brand’s official pages not only shows appreciation but also builds a library of authentic endorsements.
This strategy builds trust and enhances CLV by creating a cycle of engagement and loyalty. Customers who see their content shared by the brand feel valued and are more likely to remain loyal and continue purchasing.
Adapting to Customer Feedback
Adapting to customer feedback is crucial for building and maintaining trust, which is essential for increasing customer lifetime value. Everyone wants to feel important. Acknowledging customer feedback is a powerful way to show that a brand cares about its customers.
If a brand consistently addresses customer complaints and makes improvements based on feedback, it demonstrates a commitment to customer satisfaction and quality. This responsiveness builds trust, as customers see that the brand is genuinely interested in meeting their needs and improving their experience.
Conversely, failing to adapt to feedback can lead to customer churn, where dissatisfied customers take their business to competitors who are more responsive. Additionally, unhappy customers who feel ignored are more likely to share their negative experiences, which can damage the brand’s reputation and deter potential customers.
Adapting to customer feedback is also vital for maintaining authenticity. When customers see that their feedback leads to tangible changes, they perceive the brand as genuine and transparent.
Moreover, the most valuable customers often have the most insightful feedback. Addressing the concerns of these top customers not only retains their business and leverages their influence as brand advocates, but offers information you can use to improve your brand and offerings. Satisfied customers who feel their voices matter are more likely to recommend the brand to others, driving organic growth and increasing CLV.
How To Increase Customer Lifetime Value Long-Term
As competition intensifies and consumers become more discerning, brands must continuously innovate and adapt to stay relevant. Emphasizing trust through exceptional service, quality products, personalization, and active community engagement enhances CLV and creates a resilient brand that can weather market changes.
Brands that prioritize transparency, authenticity, and responsiveness will lead the way. Leveraging emerging technologies like AI for customer support and integrating real-time feedback mechanisms will allow brands to respond more swiftly and accurately to customer needs.
The brands that excel will be those that view trust not as a static goal, but as a dynamic, ongoing commitment. By consistently listening to customers, adapting to their needs, and delivering exceptional value, brands can build lasting relationships that drive sustained business growth.
About the Author: Pamela Covert is a Senior Client Partner at adQuadrant with 5+ years of digital marketing and technology experience. She graduated from Louisiana State University in 2018 with a BS in Marketing and a concentration in Professional Sales. From there, she’s partnered with industry leaders like Ford Automotive, Camp Bow Wow, FastSigns, and TELETIES to build and grow their paid advertising strategies. She currently resides in Texas and, outside of work, enjoys trying new restaurants, college football (Geaux Tigers!) and her blue heeler, Levi.
