You’ve calculated your customer lifetime value (CLV), and now you’re ready to apply your newfound knowledge to your marketing strategy.
But what can you do with CLV? Is there any inherent benefit to knowing it? How can you improve your marketing strategy with it?
If these are the questions you’re asking, then you’re in the right place. Here are six tips for factoring CLV into your marketing strategy.
1. Study Your Best Customers
CLV is the average value of a customer or the profit you derive during your entire relationship with them. But customers aren’t all created equal, are they? Inevitably, some spend more, and some spend less.
Evaluating your best customers enables you to optimize your marketing. You can discern what channels attracted your best customers, and allocate more of your budget to strategies that are working, and less to ones that aren’t. It would help you get better ROI from your marketing, and could also boost your CLV.
2. Segment Your Customers
Again, we’ve identified that some customers are more valuable to you, while others are less valuable. Assessing your CLV should help you gain clarity on how to segment your customers into important groups. For instance – those who are most valuable to you, those who spend more with you over time, those who are barely worth the effort, and those who are unprofitable.
Effective marketing requires continuous adjustment. As you gain clarity on what segments to nurture and maintain relationships with, and what segments to divest in, you’ll increase marketing effectiveness.
3. Share Data With All Departments
CLV isn’t just relevant for marketing – it can benefit every department in your company, most of all sales, customer service, and product development. The insights you gain from your customers can help you create a better experience overall, and what is marketing in the digital age if not an experience?
You know what channels bring in the best customers. You’ve studied the demographic data, and you’ve crafted your ideal buyer persona. The only thing left to do then is to automate your marketing.
You can have push notifications triggered by various customer actions. You can have different email sequences automatically sent out to appropriate email list segments. Though marketing inevitably requires ongoing tweaking and adjusting, you can put a lot of your efforts on autopilot once you’ve figured out what works. It gives you more time to focus on what matters.
These days, we hear more and more about the importance of a customized, personalized customer experience. By leveraging your CLV data, you can:
- Promote relevant products to the right people at the right time.
- Point them to a content piece or resource that’s likely to benefit them at this stage in their sales journey.
- Add a personal, human touch to your emails. For example, have a look at CD Baby’s shipping confirmation email.
- Do things that are un-scalable. Some small online business owners are known to send each of their customers a personalized video thanking them for their purchase. You may not be able to sustain an effort like this forever, but it can build rapport with your new prospects and customers.
6. Improve Customer Retention
With CLV, you’re gaining a deeper understanding of your customers and their needs. Having segmented your audience, you can talk to each of your target customer groups in a way that’s more relevant and helpful to them.
By keeping an eye on customer loyalty and purchase frequency, you can improve your retention. You can increase or decrease communication, create relevant product promotions, share value-adding content, and so on, depending on what you find out about your customers.
The key point here is that your CLV helps you focus on clients that are more valuable to you and your company. In turn, you can boost your marketing ROI.
How have you used your CLV to improve your marketing? How has it changed the way you approach your campaigns?
Let us know in the comments below.