Tag Archives: Marketing

Rocking It With High Customer Lifetime Value

RockingItWithHighLifetimeValueCustomers_IMAGE

The reward system for CEOs and CMOs is heavily structured toward short-term (quarterly) revenue and ROI. And the degree of success is often determined by comparison to the recent past. One of the most valuable future-looking metrics we have is Customer Lifetime Value.

The Marketing Accountability Standards Board defines it as “the present value of all the cash flows attributed to the consumer during their entire relationship with a company.” Why should you care?

CLV is critical business information for:

  • Determining how much to spend on support.
  • Developing products that meet the needs of your best customers.
  • Assessing marketing spend to acquire a customer.
  • Helping sales hone in on the most profitable customers.
  • Improving efficiency by not wasting resources on non-productive customers.

One common example is the price shopper (P), who is loyal only to the lowest price, not the brand. He/she isn’t a good candidate for a repeat sale unless you can cough up another deep discount.  At the same time, another customer (V) understands the true value of your product and will buy it at any reasonable price. Consider the dollars at stake if this were an automobile purchase.

Research your existing high value customers, and have the tools and knowledge to identify them during the selling process.

Customer (P) will buy a blowout special car, which he has negotiated to the lowest possible price. You’ll never see him again. Your CLV is simply the price he paid. Meanwhile, customer (V) will pay a fair price for his original car, and purchase three more during his driving career. In addition, he’ll recommend your brand to friends, family and colleagues. He’ll also generate additional revenue streams for scheduled and unscheduled maintenance.  By this measure, customer (V) is worth 5 times more to the company than customer P, but both showed up as individual and equal sales in your first quarter.

So, how do you sell to high customer lifetime customers?

  • Train salespeople to sell benefits – not price.
  • Don’t nickel and dime your best customers. Give them something for free every now and then.
  • Research your existing high-value customers, and have the tools and knowledge to identify them during the selling process.
  • Guide these customers down the full path of products and services you offer.
  • Know when the acquisition and maintenance cost of a customer is unprofitable and drop him or her.

To quickly understand your product’s CLV, use this simple calculator. Or put your data analyst (if you have one) to work on algorithms that might identify profitable and unprofitable customers earlier in the sales cycle.

By focusing on the lifetime value of customers, you can focus on marketing strategies that result in long-term profits, not just a sale.

To find out how computers and algorithms might be used to predict high and low-value customers, read “The Executive’s Guide to Machine Learning from McKinsey.

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Right Message. Choppy Delivery.

How you deliver a message is just as important as the message itself. Just ask Doug Hughes, a 61 year-old retired postman from Florida. Hughes’s mission was to deliver letters to all 532 members of congress regarding the Supreme Court’s Citizen’s United decision about campaign financing.

A rural letter carrier in Florida since 2003, Hughes didn’t trust his former comrades to deliver the mail. Instead, he took it upon himself to pilot a one-seater gyrocopter and landed on the West Lawn of the Capitol Building.

Hughes found himself in a world of hurt he could have avoided by heeding Marshall’s McLuhan’s insight: “The medium is the message.” He confused the medium, the gyrocopter, for the message. The ensuing media coverage sucked the air out of anything Hughes had to say. All of it was about the breach of White House security, the flight that even NORAD couldn’t detect, and endless hand wringing by security consultants.

So heads up, fellow marketers. We make this mistake every day. We lavish attention on “the message,” but we delegate or ignore the delivery medium.

Media is like a package that wraps up your precious communication or product. The result determines how you interact and feel about the content. Subtract the packaging and gold foil from Godiva, for example, and it would taste like chocolate byproduct. The type of envelope you choose for a direct mail effort might be more important than the brochure inside.

Similarly, if you’re using the same video on TV as pre-roll on YouTube, you might as well put a down payment on a gyrocopter.

I admire Hughes. He lost his son to suicide, which undoubtedly clouded his judgment. But I still have a soft spot for creative forms of protest that aren’t violent or destructive.  For all the trouble, though, I do wish Hughes’ message had been delivered.

“The Medium is the Message.” Tattoo it on your chest.

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Podcast Your Way to Niche Markets

podcast

Podcasting, generally short audio only, or video programs, are enjoying resurgence. According to Edison Research, 39 million people listen to podcasts at least once a month. Increased smartphone usage figures into the equation.

Listen to Ideopia’s Blendercast Podcast at podcast.ideopia.com.

Podcasts, web, video and internet radio now join the automatic coffee maker as technologies that accommodate their schedules, and maximize free time. For marketers, podcasting opens up a plethora of new content sources: Audio versions of blog posts, excerpts from speeches, and even comments or questions from customers. While some podcasts achieve chart-topping status, like these top programs from 2015, the relatively low cost of podcasts makes them a viable option to communicate specialized content to niche markets. While one of your engineers may not be ready for prime time, she could be very effective talking to peers at other companies.

Chance are you already have all the technology you need to start podcasting: a good microphone, a computer, and if you’re a one-take wonder, you can skip downloading free sound editing equipment.

For more about the popularity of Internet radio, see our post in Blender.

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9 Reasons to Drink the Marketing Automation Kool-Aid

Marketing automation Kool-Aid

Would you like to reduce the cost of sales, attract more leads and boost revenues? Dumb question. Of course you would. That’s why it’s time to get over the “robots controlling the world” fears, and dive into marketing automation. Now for some motivation:

Cold, hard cash

  1. Companies that automate lead management see a 10% or greater increase in revenue in 6-9 months. (Gartner Research)
  2. 78% of high-performing marketers say that marketing automation software is responsible for improving revenue contribution. (Source: Position2)

More sales. Lower cost.

  1. Companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost. (Forrester Research via Pardot)
  2. Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads. (via Captera)
  3. Lead nurturing reduces the percentage of marketing-generated leads ignored by sales (from as high as 80% to as low as 25%).
  4. The average sales cycle has increased 22% over the past 5 years due to more decision makers being involved in the buying process. (via Captera)

Blindside the competition

  1. Marketing automation software only has 3% adoption in non-tech companies. (via Captera)
  2. 63% of companies that are outgrowing their competitors use marketing automation software. (via Captera)

Ideopia can help

  1. 64% of CMOs have no process, or an informal process, to manage their marketing automation. (The Annuitas Group)
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The Easy Squeezy Branding Beerita

Beerita

  • 1 (12 fluid once) can frozen limeade concentrate
  • 12 fluid ounces tequila
  • 12 fluid ounces of water
  • 12 fluid ounces of beer
  • Ice
  • 1 lime, cut into wedges

Use beer and join the fight to eradicate frilly fluorescent green margaritas. And for once, we recommend

    not

using craft beer, because it has flavor, and that could mess up the tequila. Use the limeade can to measure the ingredients. Adjust with extra water if the mixture seems too sweet. Or add more tequila. Strain the pulp, unless, you’re really into pulp.

See all of our drink recipes here. Meanwhile, have you noticed how your marketing sings through these Beerita Goggles?

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Join Web Analytics Anonymous

Web_analytics_image

However beautiful the strategy, you should occasionally look at the results

– Winston Churchill

Web analytics for people, like me, are addictive. I’ll watch stats pileup in real-time, and get a tiny adrenaline rush everytime there’s an uptick. Judging by the puzzled looks , not everyone shares my enthusiasm. They should. Numbers of Twitter and Pinterest followers, bounce rates on web pages, and click-thrus on emails show real-world progress, or lack of it. And, with a little imagination, they can be turned into meaningful action. Marketing directors, planners and creatives who aren’t tapping into analytics are selling themselves and their brands short. This is why I’m high on analytics:

1. Hedonism. There are few things more pleasurable than seeing evidence that people are interacting with, and appreciating your work. If that doesn’t jazz you, check for a pulse, and dial up Monster.com

Web traffic grows in response to a higher blogging frequency

A more active blogging schedule increased web traffic 60%. I say we keep funding that!

2. Politics. How do you justify your budget?  On what basis do you ask for a contract renewal? What’s working that justifies a larger investment? Smartly presented analytics can tell the story, and give you the ammo to kill floundering programs.

3. Incremental improvement. A split test on email can tell you which content, design or subject line will drive the most click-thrus. Add that information to the next piece of creative you produce, and the results will continue.

For example, by switching from a text link to a green button, the click-thru rate on this email campaign jumped 117%.

Changing text links to buttons increases email click thrus.

4. Spot trends and opportunities. Amalgamate data from multiple sources, e.g. social media, web analytics, and email, to spot larger trends. When and where is your target audience most engaged? When and what do they want to buy? And what referral sources, like social media, web banners or search ads are most cost-efficient?

5. Fresh ideas. Unless you’re a quant, you probably think numbers are nerdy. But, by understanding the problems and opportunities that analytics reveal, you’ll develop insights that lead to innovation and lasting change.

6. Bragging. My favorite part when things go well. The website below grew from 1,200 monthly visits  to over 6,000 (blue line) post redesign. Web analytics enabled us to match the site’s potential to the needs of our client’s customers. Yep, there was a lot of fist pumping and beer after that one.

Web traffic increases after site redesign

You don’t need a degree in statistics to understand the most important web metrics used to evaluate websites. You just need to identify the handful that matter the most for your business. Start with the metrics that measure your key marketing objectives. Go from there, and soon I’ll see you at the Tuesday night meeting.

 

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