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In episode 52 of the Customers Who Click podcast I spoke with the CLV Lady herself, Juliana Jackson about customer value optimisation.
Have you ever wondered how the biggest brands are built? By focusing on long-term strategy as opposed to looking for quick wins and gains. That’s exactly what customer value optimisation is - delivering an excellent and unforgettable shopping experience to create customers for life.
Unfortunately, many massively underrate the value of CVO and don’t pay enough attention to customer lifetime value, which just doesn’t make sense. Who’s going to be more profitable to you long-term - a customer who buys from you repeatedly or someone who only buys from you when you have a sale on?
You need to understand who your most valuable customers are and treat them extra nice, but you also need to know who those uncertain customers are who may have made that first small purchase, but need a bit of nurturing to really drive value from.
Juliana is the Chief Evangelist at Omniconvert, providing guidance and education that transforms ecommerce brands through the implementation of Customer Lifetime Value (CLV) principles. You can connect with her on LinkedIn or Twitter.
01:59 - 08:50 - Why Brands Should Be Paying More Attention to CLV? - There’s no acquisition without lifetime value, or at least there shouldn’t be. You need to know how much it costs to acquire a customer as well as whether or not that customer is worth acquiring long-term. Essentially, not all customers are created equal and not all are worth the ad dollar you’re spending to attract them.
Rather than focusing on attracting all types of customers, you want to capitalise on those of the highest value and try to find out how you can acquire more customers like them.
08:55 - 48:23 - What Are Some Key Things a Brand Needs to Consider When Calculating LTV? - First of all, make sure you know the context behind your quantitative data. It tells you the “What” but the “Why” remains unknown and it can often be a game changer. Ultimately, understand that people don’t actually want to spend their money so make sure all your messaging always revolves around context, outcomes and trade-offs to see how you can convince them to leave their money with your brand.
Don’t disregard low value customers in favour of those who spent more on the last visit either - instead, try to find out why they’re not spending more. Could it be lack of trust? Copy not convincing enough? The “why” behind each purchase (and lack of them) is key.
And finally, forget about calculating an average LTV across your entire customer database and look into RFM segmentation (Recency, Frequency, Monetary value) to avoid wasting your time and resources. People might have similar buying habits but each customer is different and is driven by different motivators. Applying Jobs to be Done framework will certainly help you better segment your customer groups.
48:31 - 54:46 - Juliana’s Marketing Pet Peeves -Preachers on social media that talk the talk but have nothing to show for it. I’m sure you know the drill and you’ve seen it yourself where your so called ‘influencers’ post biggest marketing cliches on their social and get thousands of likes within an hour of posting it. It’s great they have fans and people who admire them but now imagine “expert” like this comes in to work on your business and messes it up really bad because the reality is, they have no practical skills behind their claims.
54:58 - 01:00:00 - Juliana’s Underrated Aspect of Marketing - Customer onboarding. Too many brands forget about their customers as soon as they convert but the post-purchase stage of customer journey also hugely contributes to the overall customer experience. Even more so because those people have handed over you their money so now it’s your turn to surprise them with great service. Unfortunately, it doesn’t happen enough.