How to increase customer lifetime value with appointment scheduling so that it doesn’t cost a fortune? Well, today we will discuss it in detail.
Every business needs customers to operate and strives to get as many as possible. That is only logical, if you want to build your business up, you constantly need to attract new customers, right?
Well, the reality is a lot more complicated than that. It is a known fact that acquiring new customers is more costly than retaining existing customers. Also, user retention strategies are a lot more profitable than customer acquisition. Research showed that increasing customer retention by 5% will increase your revenue from 25% to 95% depending on your industry.
What is customer acquisition?
Simply put, customer acquisition is getting new customers. To acquire new customers, you have to find them, attract them to your business, get them through the sales funnel and turn them into a customer.
What is customer retention?
Customer retention is managing the relations with an acquired customer, Every interaction you have with a customer after they are acquired is a part of the customer retention process.
Customer acquisition and customer retention in themselves are just some concepts. Only when you calculate how much you invest into them they actually get any meaning. But even then, they are just numbers that show how much you spend on getting new customers and how much you spend on keeping them. But using these numbers, we can calculate a much more powerful metric, customer lifetime value (CLV).
Customer Lifetime Value (CLV)
Customer lifetime value is a strong metric that is used to measure the revenue you make from your customers throughout their lifespan (the amount of time they make business with you). Customer lifetime value can be used to learn if you are actually making a profit from getting new customers or if you are operating at a loss.
In order to calculate customer lifetime value accurately, you need to have a strong database of your customers. Customer lifetime value is calculated by multiplying the average values of:
- How much money each customer spends on a single purchase (average order value - AOV)
- How frequently do they make a purchase and (average purchase frequency - APF)
- How long do they keep purchasing (average customer lifespan - ACL)
CLV = AOV x APF x ACL
Use case of Customer Lifetime Value
With CLV you can compare how much you spend on acquiring a customer and how much you will make from that customer. If your customer acquisition cost (CAC) is higher than CLV, you need to make some changes.
However, it is not the strongest part of CLV. CLV lets you decide when your growth has mellowed down and when you need to focus more on customer retention. While your CLV is substantially higher than your CAC, you can focus on getting more customers. After a while, CAC will get close to CLV and that’s when you know you have to invest more into retention and the cycle will continue.
Case Study
Now, let’s see customer lifetime value with appointment scheduling in a fictional case study. Imagine you are a dentist with 7 years of experience in a dental clinic on the east coast of the US. Then one day, you decide to move to the west coast and open your own dental clinic there. You open your dentist in California and spend a lot of money on ad campaigns to attract customers.
For the first few months, your business is good, you have worked with a lot of customers and you have several repeat customers. But you feel that most of the customers aren’t staying and you wonder why. You ask your nephew who has worked in sales and customer support for years. He asks you a bunch of questions and one of them sticks in your mind. “How long do your customers have to wait?”
You see that when your ad campaigns were active you had a lot of calls and long queues in front of your office, but they disappeared after the end of the campaigns. Your nephew says that you need to make sure that everyone knows when you are available so they don’t wait and waste time. You analyze your competitors and see that all of them use an online appointment scheduling system.
After brief research, you also set up an online appointment scheduling system and your patients start to increase. You understand that people didn’t like waiting for several hours to get an appointment with you and when they can know when you are available, it was a matter of time before they came back.
Results
Although our case study is fictional, what we take away from that is completely real. There are two main lessons to be taken away from these case studies:
- Customers want convenience in appointment booking process
- They will go somewhere else if they don’t find convenience
In the next sections of this blog post, we will examine why customer lifetime value is important in appointment booking and how to increase LTV with appointment booking in small businesses.
Why Customer Lifetime Value is important in appointment booking?
If you operate with an appointment booking model, you are depending on your customers. In that case, would you like to be dependent on completely random people or would you like to do work with people who have already been your customers and know you?
Having a high Customer Lifetime Value with appointment scheduling means that you have a healthy business that will continue to support you. As a business offering services, you need repeat customers to stay alive, arguably infinitely more than other sectors which can operate with the daily customers they get. So you need to prioritize and increase customer lifetime value. How? Keep on reading.
==> Also read: How to increase event ticket sales and revenue
How to increase Customer Lifetime Value with appointment scheduling?
Increasing customer lifetime value is increasing customer retention. In the service business models which operate on bookings, it is important to have an easy-to-use system in place. As a business owner, it is a no-brainer for you to make the transition to the seamless and only experience from the old, junky and time-consuming endless calls of the 20th century.
But as the competition strengthens, an online scheduling system is not enough in itself, you should also let your customers do more in your online scheduling system to better serve your customers. Here are a few options suggesting how online booking can boost bottom line of your company.
Remind and follow-up
We all are humans and sometimes we forget things. That’s why reminding your customers about their upcoming appointments can increase customer lifetime value with appointment scheduling. If your customers feel they are valued with these small touches, they will be more willing to come back to use your services in the future.
Make sure to check with your customer to see how was their experience and if they had any issues during the process. Sending follow-up emails or SMS messages can greatly boost customer lifetime value with appointment scheduling processes.
Automate the process
One great way to improve customer lifetime value with appointment scheduling is to make everything automated. Customers want to schedule online? Done, even send them a confirmation mail just to make sure. They want to reschedule? No, problem. Need to visit again? Say hello to the recurring appointment function!
As you see, automation gives power and responsibility to the customer. They do all the work themselves and even feel happy and valued. This is the power of letting the automation process do its job.
Give control
Customers have different needs and want. Maybe they need to get more than one of your services, maybe they don’t want to come alone, maybe they want to change some details about the appointment. Customer lifetime value with appointment scheduling depends on how happy they are. If your system adapts to customer needs, a happy experience is inevitable!
Provide information
Customers want to know more about the service they are going to get. As competition shows itself, only showing the name and job of the person who will serve is not enough. It is a great idea to show comments and reviews of other people, give a snippet about the service-providing person and even showcase a simple introduction that can boost lifetime value (LTV) and appointment bookings.
Set and define limits
Setting limits on your customers might seem like a turn-off for the customers, but in some cases, it does the opposite. Let’s say that your customer has a friend that wants to come to the appointment but doesn’t know if she will be allowed and if your establishment will accept a pet to enter.
Limiting the booking to a person only would answer this question, but it will also let you charge extra if they need pet care or if they want to come with a friend. Although, it might first seem intimidating, being clear about your policies is a lot better than saying no to a customer when they are already at your front door.
Offer personalized discounts
This is perhaps the easiest one to think of, hence we left it for the last. Offering personalized discounts, providing loyalty programs, giving out coupons and gift cards is your best bet in increasing your sales, therefore increasing your customer lifetime value with appointment scheduling services.
A tool to rule them all
If you are looking to increase customer lifetime value with appointment scheduling, then read the above-mentioned points and make sure that your tool of choice covers all of them. If you want to find such a tool or if you want to replace your current tool with something comprehensive and powerful, we have got you covered.
Booknetic is a fully automated WordPress plugin that provides an all-in-one solution for online appointment bookings. With Booknetic, you can offer all the options mentioned above and many more features. Thanks to Booknetic’s extensive features and integrations, you will be able to boost your LTV and appointment bookings in no time! Try Booknetic now!