When you are talking to your marketing director or agency, you know just as well as I do that they do a great job pulling out the acronyms to make sure they show they are using all the popular marketing methods to grow your business. If I don’t hear SEO, PPC, SEM, CMS, CRM, CR, CRO, CTA, KPI, PPC, SMM, or UX during a meeting, I assume I am in the wrong meeting. These are all relevant marketing methods/platforms but there is one metric I rarely hear. Something that I think is just as critical and if it just got some time and attention, could increase your business like crazy. That is Customer Lifetime Value (CLV).
More times than I would care to admit, when I have been called in to perform an evaluation on a companies marketing strategy, I find that they tend to spend ample amounts of money on marketing, but little on retention. It makes sense. Retention is a hard thing to increase. Most marketers tend to spend money on acquiring customers but the majority of money can be made from customers you already have. There is a key to increasing your Customer Lifetime Value. It’s not a secret, it’s just not well known because every other article you read is about how to increase your conversions, not your CLV. There are many things you can do to increase your CLV, including creating more services/products, having add-ons, increasing interaction or keeping the customer longer. These are great but the secret to having a high CLV is fulfilling the promise you make to your customers. The moment you break your brand promise is the moment they leave you. A lot of businesses base their promise on price. “I promise you will find the best price in town when you shop at Toms.” The only issue with this is that the moment you break your promise by not being the cheapest, is the moment you lose customers. If you promise to have the best customer service, or the best quality and break that promise, you lose customers. What I usually recommend to my clients is to make fulfilling that promise a foundation of their daily operation. To increase your revenue from your current clients, start finding ways to engage in conversations around your promise. For instance, if you are a restaurant that promises high quality ingredients, periodically send out messages and posts and showing the origins and care of that food. Don’t try to convert them back into eating, simply fulfill your promise and they will.