<p>Along with increasing your business’s revenue, happy customers can also help to spread the word about your services and boost your reputation. But did you know that there’s a difference between satisfying and delighting your clients?</p><p>In our guide, we’ve outlined the principles of customer delight and how it differs from satisfaction so you can go the extra mile to give your customers the best experiences possible. We’ve also included a few ways to measure delight so you can see exactly how your brand measures up and what you can do to improve.</p><h2>What is customer delight?</h2><p>Customer delight is when customers’ expectations are not just met but exceeded, leading to them feeling valued, appreciated, and having a positive experience with a brand.</p><p>It’s about creating memorable interactions that resonate with customers on a personal level, whether it’s by going above and beyond to help them solve a problem, fulfil their needs, or appeal to their interests. When a customer is delighted, it’s likely that they’ve received a level of service, engagement, and care that goes beyond the ordinary.</p><p>The idea behind customer delight is that a happy customer is more likely to become a loyal advocate for your brand. This is because impressing your prospective clients can cause them to return for future purchases and also share their experience with a broader net of personal and professional contacts.</p><h2>How is customer delight different from customer satisfaction?</h2><p>‘Customer satisfaction' and 'customer delight' might seem interchangeable at first glance; however, they are two different concepts.</p><p>In summary, customer satisfaction means simply meeting customer expectations, nothing more or less, whereas customer delight involves exceeding their expectations and leaving them with a lasting and positive experience.</p><p>With more and more businesses vying for attention in an increasingly crowded landscape, exceeding customer expectations is an excellent way to capture their attention — and keep it.</p><h2>Why is customer delight important?</h2><p>With <a href="https://www.insiderintelligence.com/content/top-reasons-consumers-switch-brands" target="_blank">over 70% of customers admitting to switching brands in search of better value options,</a> businesses need to do more than just satisfy their customers to secure loyal clientele and foster long-term success.</p><p>Here are some ways that customer delight can be beneficial for businesses:</p><ul><li><strong>Increases customer retention</strong> — A delighted customer is more likely to return and engage with your business on a recurring basis. It’s also often cheaper to <a href="https://www.feefo.com/uk/business/resources/customer-retention/how-to-effectively-build-and-measure-customer-loyalty" target="_self">retain existing customers</a> than to <a href="https://www.feefo.com/uk/business/resources/customer-acquisition/customer-acquisition-guide" target="_self">acquire new ones,</a> making customer delight a cost-effective strategy.</li><li><strong>Encourages positive word-of-mouth and referrals</strong> — Delighted customers become enthusiastic advocates for your business. They share their positive experiences through word-of-mouth, social media, and review platforms like Feefo, which can significantly amplify your brand's reach and reputation.</li><li><strong>Higher revenue potential</strong> — The more customers you can delight, the more willing they may be to engage and spend more. Plus, they’re also more likely to explore other offerings and services, leading to more potential avenues for generating revenue.</li><li><strong>More resilience to negative experiences</strong> — Even top-rated businesses receive the odd dissatisfied customer. When this occurs, delighted customers are more likely to forgive minor mishaps due to the positive emotional connection they have previously had with your brand.</li><li><strong>Enhances online reputation</strong> — In a digital era where<a href="https://www.feefo.com/uk/business/features/collect-reviews" target="_self"> online reviews </a>greatly influence purchasing decisions, delighting customers can lead to a flourish of positive reviews. This enhanced online reputation, in turn, attracts more customers.</li><li><strong>Improved customer feedback</strong> — Delighted customers who have received an above-and-beyond experience with a brand could be more likely to provide invaluable feedback that can help businesses improve and innovate.</li></ul><h2>Six ways to drive customer delight</h2><p>While your business might be succeeding at satisfying customer expectations, delighting them means going that extra mile.</p><p>Here are our top tips for how to create memorable, positive experiences for your audience to drive customer delight.</p><h3>1. Understand your customers</h3><p>The first step to delighting your customer is to understand who they are, what they value, and what their expectations might be. To build comprehensive customer profiles, you can gather this information with <a href="https://www.feefo.com/uk/business/features/consumer-insights" target="_self">customer feedback,</a><a href="https://www.feefo.com/uk/business/features/surveys" target="_self"> surveys,</a> and<a href="https://www.feefo.com/uk/business/features/advanced-analytics" target="_self"> data analytics.</a> The more you know about your customers, the better positioned you are to surprise and delight them.</p><h3>2. Personalise experiences</h3><p>Personalisation is key to showing customers that you value each and every one of them. After all, your customers each have their own needs and concerns.</p><p>To address their individual requirements, tailor interactions, communications, and offerings to their preferences and past behaviours. This could range from sending personalised emails to recommending products or services that meet their specific pain points.</p><h3>3. Reward loyalty</h3><p>Your most loyal customers are invaluable as they can help spread word-of-mouth referrals and may be less likely to churn. As such, reward them for their loyalty to ensure they know that their business is appreciated and valued.</p><p>This could involve offering them exclusive discounts and perks for their consistent custom, such as implementing a loyalty program that gives them something back in the long term.</p><p>An unexpected benefit is sure to enhance the customer’s experience and delight them.</p><h3>4. Engage proactively</h3><p>Don’t wait for customers to reach out with problems – they may not even bother giving you the feedback and simply jump ship instead. To avoid this and reduce your churn rate, engage with them proactively to check on their satisfaction, offer assistance, or provide valuable information.</p><p>Not only does this allow you to gather helpful feedback that can help you to improve your service and offering, but proactive engagement shows that you care about their experience, even when there isn’t a problem to solve.</p><h3>5. Educate and empower your customers</h3><p>Offer resources, tools, and information to help your customers get more value from your products or services. This can help them to feel like your brand is on their side, supporting them to succeed.</p><p>Customers who feel empowered and informed will likely have a more positive perception of your brand.</p><h3>6. Foster a customer-centric culture</h3><p>People like to feel part of a community, as it’s reassuring to know that there are others out there who share the same needs, interests, or goals. That’s why cultivating a sense of user community can put your business towards the path of increasing delight.</p><p>Whether it’s to share experiences or resolve queries, a community setting allows your audience to interact with each other and your employees. It might be through a closed forum or via a social media channel.</p>

<h2>How can you measure and monitor customer delight?</h2><p>Understanding and assessing the level of customer delight your business is achieving is crucial for refining your strategies and ensuring you are on the right track towards fostering a loyal customer base.</p><p>Here are some insightful metrics and methods to measure and monitor customer delight:</p><h3>1. Customer Delight Index (CDI)</h3><p>The Customer Delight Index is a comprehensive metric that evaluates various aspects of customer experience to gauge the extent of customer delight. It could include things such as overall satisfaction, likelihood to repurchase, and likelihood to recommend, among others.</p><p>By analysing customer responses through surveys and feedback, businesses can derive a CDI score that reflects the degree of customer delight they are delivering.</p><h3>2. Customer Satisfaction Score (CSAT)</h3><p>A Customer Satisfaction Score is a straightforward metric that’s used to measure a customer’s immediate satisfaction with a product or service.</p><p>It typically involves asking customers to rate their feeling of satisfaction on a scale, usually from very dissatisfied to very satisfied or by giving a score of 1-5. While CSAT primarily focuses on satisfaction, a high CSAT score over time or across different areas of your business can be indicative of customer delight.</p><h3>3. Churn rate</h3><p>Churn rate reflects the percentage of customers who stop shopping and interacting with a business over a specific period. While it doesn’t analyse the reasons why, it gives a good indication of how many customers a company is losing over time.</p><p>A low churn rate often signifies that customers are content and potentially delighted with your service, while a high churn rate may suggest dissatisfaction.</p><p>The calculation for identifying customer churn rate is:</p><p style="text-align: center;">Lost customers ÷ total customers x 100 = Churn rate</p><p>Say, for example, your business had 5,000 customers from January to June, but you lost 1,000 of them. According to the calculation, your business would have a 20% churn rate for the six-month period.</p><h2>Customer delight examples</h2><p>Achieving customer delight may look different for various brands and industries. Here are a few of our favourite examples of how popular businesses have made their customers happy:</p><h3>1. Amazon</h3><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://lh3.googleusercontent.com/pf7snqzTRptSbOxs_3LhLN8wcv445nMMimFTGePrXot2HP4H-bjD5iZAxGBThLvIeG76nPXGDPFZklofXeb2wWmWRGNiGHlxBTLGbgAxz6xpuQFTdC0dWHoaua_PfdnucGihvUkJ5o6Tz8Y-" width="100%" height="auto" style="margin: auto;text-align: center;width: 100%;" /></div></figure><p style="text-align: center;">Source: <a href="https://www.amazon.co.uk/primebigdealdays" target="_blank" style="text-align: center;">Amazon</a></p><p>One of the biggest and most well-known examples of a successful customer delight strategy is Amazon’ Prime Days.</p><p>Offered only to their Prime members, subscribed customers can access limited-time deals on thousands of products. For Prime members, this can mean huge savings on goods that the general public isn’t privy to.</p><p>It uses the ‘fear of missing out’ tactic to foster a sense of exclusivity and community, encouraging non-Prime members to sign up for the Prime membership and rewarding those who have already joined.</p><h3>2. Sephora</h3><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://lh5.googleusercontent.com/GRivzKvcIWmvkZECbP0iPvWhuUqYr5VFbpxIHqd5h56leHpmtuR1MOXHZQ-kROWgpdyRWcEgYmcfEf_lLB2qCUTvtLvL2jV7NqsBFC3DNCORUDVNJYS1M5d3uZCsE6y_c34Dl2eTzK8INrPK" width="573" height="348" style="margin: auto;text-align: center;width: 573px;" /></div></figure><p style="text-align: center;">Source: <a href="https://www.sephora.co.uk/c/rewards" target="_blank">Sephora</a></p><p>When it comes to rewards schemes, Sephora has an excellent loyalty program in place to give back to their customers.</p><p>When customers sign up for Sephora Rewards, they become ‘Beauty Insider VIPs’ with access to exclusive offers – which just goes to show that clever naming conventions can also help to make customers feel special and prioritised.</p><p>As VIPs, they receive money off their future purchases, exclusive discounts on their favourite brands, and a yearly birthday treat of 20% off an order.</p><h3>3. Patagonia</h3><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://lh3.googleusercontent.com/NFfzUASjosSkgsyF-fORHozwY9wmjfBBZYTAHNyk9S3IXJ-6BSRBFwnSDBgeIw7tZ54S0osQDg-4kdMpVTlA6a0nY89JroFAR4KMhIm4O8HUmojNC5tpaFqViOAUoi8S4w1Fti8VLr7291xj" width="584" height="418" style="margin: auto;text-align: center;width: 584px;" /></div></figure><p style="text-align: center;">Source: <a href="https://help.patagonia.com/s/article/Repair-Process?_gl=1*1u3rx0b*_ga*OTg1Njk2MjAwLjE2OTU4MjIxNzM.*_ga_1SYPSJZYJ5*MTY5NTgyMjIyNy4xLjEuMTY5NTgyMjcwNy4wLjAuMA.." target="_blank">Patagonia</a></p><p>Few brands manage to channel their company goals through their actions as well as Patagonia.</p><p>Patagonia’s key messaging to protect the planet and prioritise purpose over profit is evident throughout their campaigns, but also through their repair initiative. They understand that buying a new outdoor coat or piece of clothing can be an investment and that their customers want quality garments that last, which is why they offer their customers repairs on any previously purchased Patagonia items.</p><p>As well as helping to make their customer’s goods last longer, it naturally aligns with their sustainability ethos and ‘buy less, buy quality’ messaging.</p><h2>Start delighting your customers with Feefo</h2><p>Want to make your customers feel special and delighted? That’s where our experts at Feefo can help. From reaching out to your audience to gather tailored insights into what they really want, to measuring how loyal your customers are, we’ve got a solution to get you started.</p><p><a href="https://www.feefo.com/uk/business/contact" target="_self">Get in touch</a> with us today to learn more.</p><p></p>

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What is Customer Delight, and How Can Your Business Achieve it?

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<p>By understanding what is customer lifetime value (CLV), businesses can delve into the worth of every customer, not just for a single transaction but across the entire span of their relationship with the company. Beyond understanding their current spending habits, the lifetime customer value formula gives you insights into predicting future revenues, making it a cornerstone for informed business decisions.</p><p>So, why should businesses prioritise understanding their customers? Because every customer has a unique value, which is more than just their latest purchase. It's about forecasting their potential, adjusting strategies, and ultimately ensuring the business thrives in the long run. And the key to unlocking this potential? The customer lifetime value formula.</p><h2>What is customer lifetime value?</h2><p>At its core, customer lifetime value (CLV) is a metric that tells you the net profit you can expect to earn from a customer throughout their relationship with your business. But it's more than just a simple calculation. When you dive into what is customer lifetime value, you're tapping into a profound understanding of customer behaviour, engagement, and the long-term value they bring to your business table.</p><p>Let's break it down.</p><p>Imagine a customer who makes one purchase from your store and never returns. Now, compare them to another who buys smaller items but does so every month for several years. Using the lifetime customer value formula, you can determine that the latter — though making smaller purchases — has a higher CLV, indicating a deeper level of engagement and loyalty.</p><p>An increased CLV often signifies better customer engagement, enhancing business profitability. Engaged customers tend to buy more, advocate more, and remain loyal to your business.</p><h2>Why is customer lifetime value important?</h2><p>In essence, the importance of customer lifetime value formula stretches far and wide, influencing everything from day-to-day operations to long-term strategic planning. It's not just about understanding your customers' current value but forecasting their potential and sculpting strategies that cater to their evolving needs.</p><p>Firstly, consider the sheer economics of customer retention versus acquisition. It's a fact that it can cost up to five times more to acquire a new customer than to retain an existing one. By understanding and optimising the lifetime customer value formula, businesses can harness this economic efficiency, directing resources more judiciously.</p><p>A high CLV indicates that customers aren't just making one-off purchases but are continually engaged, coming back for more, and likely advocating for your brand. This repeated engagement is the bedrock of brand loyalty. When customers repeatedly choose you over competitors, it's a clear testament to the trust and value they associate with your brand.</p><p>Beyond just loyalty, CLV serves as a beacon for strategic budget allocations, especially when it comes to sales, marketing, and advertising. Knowing the lifetime value of a customer formula allows businesses to gauge the long-term revenue potential of their customer segments. This insight can be instrumental in determining where to invest more and where to scale back, ensuring that every penny spent is a step toward higher profitability.</p><h2>What is the customer lifetime value formula?</h2><p>The customer lifetime value formula is a sequence of calculations that distils the intricate nature of customer relationships into a singular, comprehensible figure. Before we dive into the formula itself, it's imperative to familiarise ourselves with the primary variables that make up this calculation:</p><p><strong>1. Average Order Value (AOV)</strong>: This is the starting point. It represents the average amount a customer spends when they make a purchase. Simply put, it's the total revenue over a set period (often a year) divided by the number of purchases made.</p><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt4df45a018afa49ce/6598090cfa5809040a68de0c/AOV-min.png" alt="AOV-min.png" height="auto" style="text-align: center;" /></div></figure><p></p><p>This metric offers a snapshot of customer spending behaviour, but it's worth noting that it's an average. Different customers and seasons might show different spending patterns.</p><p><strong>2. Purchase Frequency Rate (PFR)</strong>: Now that we know how much, on average, a customer spends, we need to discern how often they open their wallets. This metric showcases the frequency of a customer’s transactions. To determine PFR, you'll take the total number of orders over your time frame and divide it by the number of unique customers.</p><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/bltce02ad14da5c0ec2/6598092b19bebd040a14108b/PFR-min.png" alt="PFR-min.png" height="auto" style="text-align: center;" /></div></figure><p></p><p>Beyond just being a variable for our CLV calculation, PFR holds its own weight, indicating the stickiness of your product or service.</p><p><strong>3. Customer Value (CV)</strong>: This is where AOV and PFR come together in a harmonious blend. CV informs you about the revenue an average customer brings within a specific period. It’s the product of AOV and PFR.</p><h3 style="text-align: center;">CV = AOV × PFR</h3><p></p><p>While CV provides an average, remember that the true value of each customer extends beyond just monetary terms. Loyalty, advocacy, and other intangible factors play a part, too.</p><p><strong>4. Average Customer Lifespan (ACL)</strong>: This is the tricky one, as it delves into predicting the future. ACL seeks to understand the duration for which a customer stays connected to your business. It's the average number of years a customer remains a patron. A simple way to calculate it involves taking the sum of customer lifespans and dividing it by the total number of customers.</p><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt0fa541f3e23f6c3f/65980947e416c8040a55e26d/ACL-min.png" alt="ACL-min.png" height="auto" style="text-align: center;" /></div></figure><p></p><p>Now, with these variables at hand, we can delve into the lifetime value of a customer formula: <strong>CLV = CV × ACL</strong>. Or, in more expanded terms: <strong>Customer Lifetime Value = Customer Value × Average Customer Lifespan</strong>.</p>

<h2>How to calculate customer lifetime value?</h2><p>Deciphering the lifetime value of a customer is like assembling a jigsaw puzzle. Each piece, from Average Order Value, to Purchase Frequency Rate, offers a glimpse into your customer's journey. Let's break down each of these components, using both formulas and examples to understand this essential metric.</p><h3>1. Average Order Value (AOV)</h3><p></p><ul><li>Formula: AOV =</li></ul><img asset_uid="blt4df45a018afa49ce" src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt4df45a018afa49ce/6598090cfa5809040a68de0c/AOV-min.png" alt="AOV-min.png" height="auto"/><ul><li>Example: If you generated $10,000 from 200 orders last month, your AOV would be:</li></ul><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt510c312e5c9e0d9d/6598096fbacd7d0407bb9266/Frame_2670-min.png" alt="Frame_2670-min.png" height="auto"/><h3>2. Purchase frequency rate (PFR)</h3><p></p><ul><li>Formula: PFR =</li></ul><img asset_uid="bltce02ad14da5c0ec2" src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/bltce02ad14da5c0ec2/6598092b19bebd040a14108b/PFR-min.png" alt="PFR-min.png" height="auto"/><ul><li>Example: If those 200 orders came from 150 unique customers, then:</li></ul><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt5843492aca778247/6598098f0ab900040ae12145/PFR_(1)-min.png" alt="PFR_(1)-min.png" height="auto"/><p>= 1.33. This means each customer, on average, purchased a little over once during the period.</p><h3>3. Customer value (CV)</h3><p></p><ul><li>Formula: CV = AOV × PFR</li></ul><ul><li>Example: Using our earlier figures, the CV would be — CV = $50 × 1.33 = $66.50</li></ul><h3>4. Average customer lifespan (ACL)</h3><p></p><ul><li>Formula: ACL =</li></ul><img asset_uid="blt0fa541f3e23f6c3f" src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/blt0fa541f3e23f6c3f/65980947e416c8040a55e26d/ACL-min.png" alt="ACL-min.png" height="auto"/><ul><li>Example: If 10% of your subscribers leave each year (a churn rate of 0.1), then: ACL =</li></ul><figure style="text-align: left"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/bltc23096bde800a6d0/659809ae2f89a6040a06538e/Frame_2671-min.png" alt="Frame_2671-min.png" height="auto" style="text-align: left;" /></div></figure><h3>5. Calculating customer lifetime value (CLV)</h3><p></p><ul><li>Formula: CLV = CV × ACL</li></ul><ul><li>Example: If our average customer's value is $66.50 and they stay with us for 10 years — CLV = $66.50 × 10 = $665. This is the worth of our average customer over their lifetime with our business!</li></ul><h2>How to increase your customer's lifetime value</h2><p>Boosting the lifetime value of your customer isn't just a game of numbers; it's an art. Just like an artist hones their skills with practice, businesses too can refine their strategies to elevate the value of every customer.</p><h3>1. Upsell</h3><p>When customers are already invested, introducing them to higher-value products or services is both intuitive and effective. The lifetime value of customer formula surges when upselling is done right, as it provides customers with enhanced solutions they might not have realised they needed!</p><h3>2. Focus on Satisfaction</h3><p>It's not all about selling; it's about serving too. Stellar customer service not only retains customers but turns them into brand ambassadors. A satisfied customer will come back, increasing their individual customer lifetime value and potentially bringing new customers through word of mouth.</p><h3>3. Discounts and Offers</h3><p>Who can resist a good deal? Timely promotions serve as sweet spots in a customer's journey. They not only incentivise purchases but remind customers of the value they're getting, prompting them to stay engaged and loyal.</p><h3>4. Loyalty Program</h3><p>Now, here's a golden ticket. Reward systems for recurring customers work wonders. Whether it's a points system, exclusive discounts, or early access, showing appreciation for continued business magnifies the lifetime value of a customer. It's not just about transactions; it's about forming lasting relationships.</p><h3>5. Keep in Touch</h3><p>Consistent, relevant communication is more than just sending out newsletters. It's about understanding what your customers want to hear and when. Regular check-ins, product updates, or just a simple "We're thinking of you" can make a world of difference in how a customer perceives your brand.</p><h3>6. Retention</h3><p>Lastly, the magic word – retention. The longer a customer stays, the higher their value. But how do you ensure longevity? Personalisation. When customers feel like they're more than just a number, when their preferences and needs are catered to uniquely, that's when they stick around. In the end, increasing how to calculate the lifetime value of a customer becomes second nature when retention takes the front seat.</p><p>Increasing your customer's lifetime value isn't about one grand gesture. It's an amalgamation of consistent efforts, understanding, and delivering value at every step of the customer journey. It's a dance, and when orchestrated right, both you and your customers emerge winners.</p><h2>Learn more about CLV with Feefo</h2><p>Are your current customer engagement strategies truly maximising potential? Do they align with the insights offered by the customer lifetime value formula? <a href="https://www.feefo.com/uk/business/contact" target="_self">Get in touch</a> with our friendly team today to see how we can help you redefine your strategies to harness the potential of CLV.</p>

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What is Customer Lifetime Value, and How to Calculate It?

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