A Lifetime Value Strategy is designed to increase your customer’s value during a certain period of time. For example, the lifetime value of your customer begins at the first interaction, their value increases at the first purchase, and their value further increases after repeat purchases and referrals. The total value of your customer shouldn’t end at the initial purchase, rather, your customer’s value should increase as time goes on. In this article, I discuss how to increase the value of your customer over a period of time. Enabling the Customer to Improve Your Company Many marketing strategies that orbit around the idea of Lifetime Value (LTV) focus on the difference between how much it costs to acquire a customer and how much value that customer brings to the company. If it cost $10 to acquire a new customer, but that customer only spent $1 on their initial purchase and then disappears, your company is not going to remain a company for very long. The job of the marketing strategist is to figure out how to increase the value of the customer, so that over the long run, they spend more money than it took to acquire them. One way to do that is to enable the customer to help improve your company. Taking a note from Michael Schrage’s article from the Harvard Business Review, he states that, “customers become much more valuable when… To me, that almost sounds like a focus group on steroids. To collect that kind of information (without herding a group of customers into a closed room), you’ll need an LTV strategy integrated with your Marketing Content Strategy, which coincides with the fourth phase of the buying cycle, which is retention. Not only are you looking to retain your customer, but you’re looking for valuable feedback: how do we improve, what do you want, how do you use the product, what are your pain points, what are your comfort points, and so on. You will need to provide a means for your customers to provide that information, whether through a forum, a chat room, social media accounts, meet ups, interactive webinars, or an opportunity to be showcased in a case study; the avenues to obtain feedback are out there, you just need to implement them. Having an active community that provides feedback, suggestions, reviews, and input are vital to a successful Lifetime Value Strategy. How LTV Applies to the Mobile Game Industry The mobile game industry, as reported in VentureBeat, was worth $91 billion worldwide in 2016. It’s an industry that’s only going to grow as time goes on. And now, with Augmented Reality and Virtual Reality taking off, the mobile space is only going to keep getting larger—which means the competition is only going to get tougher. So, how does the mobile game industry look at the Lifetime Value of their customers? For some, it comes down to Cost per Install (CPI) and Cost per Click (CPC), which translates to: does it cost more to acquire a customer than it does for that customer to install the game, and when they do, how much do we earn through advertising (the value of CPC). If the customer does provide greater value through an initial purchase than it cost to acquire them, then you’re doing great! If not, then you need to look further on how you’re going to increase the customer’s LTV. The first step is to calculate the Lifetime Value of your customers. Lloyd Melnick, author of, Understanding the Predictable: How to calculate, understand, and improve Customer Lifetime Value to build a great company, lists “...three categories of variables used to calculate LTV: Conclusion
Hopefully, this article explained why the Lifetime Value of your customer is very important: not only does it provide a metric that compares spending to customer value, but that by implementing an LTV strategy, combined with your Content Marketing Strategy, you can increase the value of your customer over time—and at the same time improve your company’s product. The initial purchase is only the beginning, after that, you not only need to retain your customer, you need that customer to provide vital feedback. In that way, you can build a supportive community around your successful business. If you are interested in applying a Lifetime Value Strategy to your Content Marketing Strategy, get in touch!
0 Comments
A successful content marketing strategy will grow your audience and enable you to increase your potential customer base. This article will walk you through the basics of developing a content marketing strategy along with an overview of how it fits within the buying cycle. For a closer look at an introduction to content marketing, please read my earlier post here. Developing a Content Marketing Strategy One of the first things you’ll want to do when developing your content marketing is to learn the overall goals of the company. For most start ups, the overall goal of the company might be taking the product to market, or in most cases, simply to grow. Content marketing fits in great with both of these overall goals in that you can use your content to both educate consumers on your product and to increase awareness of the product through different mediums—forums, blogs, websites, webinars, infographics, etc. Determining Your Audience After you learn your company’s overall goals, you’ll want to discover who your audience is. For example, are you looking to target middle aged parents looking to buy a new car or developers who are looking for a solution to their problems? Either way, you want to learn their pain points. For my client Carjojo, their customer’s pain point is negotiating the best price when buying a new car; their comfort point is that Carjojo can either do the negotiating for them, or at least, provide data to help them do their own negotiating. One way to determine your audience is by looking at who participates in your forums, or who replies on Twitter, or who likes you on Facebook, or who comments on your blog post, and so on. Developing Themes around Your Audience Now that you have an idea of who your audience is and you know their pain and comfort points, you can develop themes. You can showcase these themes through introductory blog posts that describe upcoming features to help your customers with their pain points. Good blog post topics also describe your product’s features that make current customers happy. This is also a good time to develop an editorial calendar, which I discuss in this post. Fitting Your Content Strategy Within the Buying Cycle
Here, I provide a quick outline of how your content strategy will fit within the buying cycle. For a closer look at this topic, you can read my earlier post, Understanding the Buying Cycle.
Using Metrics to Determine Overall Impact Before you start publishing your content, you’ll want to have a good analytics program tracking your progress. For example, Google Analytics can be easily applied to most online platforms and will instantly start providing key insights as to who is on your site and what they are doing there. It’s a good idea to watch several different key indicators to get a feel for what your audience is doing, but it’s best not to focus on any one metric in particular, and don’t get hung up on why there was a spike on Tuesday and a slump on Thursday. It’s better to look at overall trends when determining how to adjust your strategy. You might get a good idea of what’s working and what’s not working after collecting about a month’s worth of data, but you’ll see the larger picture when you have six months to a year’s worth of data. By following this content marketing strategy, you should increase awareness of your company, which should help the overall goal of your company. Don’t expect this to happen overnight. It will take daily updates, revisions, and close analysis of your metrics to make it happen. |
Michael RohdeResult-driven marketing Categories
All
Archives |
Proudly powered by Weebly