Lifetime Customer Value
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This presentation was given at the 2013 edition of Sitecore’s Digital Trendspot event at the Emirates Stadium. The deck asks ‘Who exactly are a brand’s ‘lifetime customers’ and what do we do with them?’. In answering this question, the power of ‘Known Peer Influence’ is examined, along with a number of tactics and strategies for finding the people that are truly evangelistic about your brand, and growing their loyalty and influence.
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Lifetime Customer Value
- 1. What is a lifetime customer?
- 2. What is a lifetime customer?
- 3. Q: Someone who buys our product again and again? A: Maybe... Q: A customer whose needs change over a period of years? A: Maybe... Q: Someone we should sell to for the whole of their lifetime? A: Maybe...
- 4. What if the most important „lifetime customers‟ are none of these things...
- 7. “Not everything that counts can be counted. And not everything that can be counted counts.” – Albert Einstein
- 8. What about the stuff that‟s more difficult to measure?
- 9. What if your „lifetime customer‟ isn‟t even a customer?
- 10. Or, what if your best „lifetime customers‟ have only bought from you once?
- 11. What if they purchased years ago, but never again?
- 12. What about the real evangelists? What about the people who love your product and brand, and don't miss a chance to shout about it?
- 13. Those people really matter, but may not show up in the traditional business analytics...
- 14. We all know people who love certain products and services...
- 15. That „love‟ often has a very tenuous relationship to repeat purchases or measurable customer value...
- 16. Some people buy once, and love you forever...
- 17. But...
- 18. By focusing on current or recent customers, encouraging repeat purchases, and improving lifetime value...
- 19. Are we ignoring the really important people?
- 20. Awareness Interest Evaluation Intent Purchase
- 21. But this funnel doesn‟t cater for „lifetime customers‟, or their influence on other people...
- 22. The McKinsey model puts it another (better) way...
- 23. Evaluation Loyalty loop Purchase Initial consideration Trigger Postpurchase experience
- 24. When evaluating, 92% of customers rely on people they know
- 25. That‟s „Known Peer Influence‟... ...and it‟s huge.
- 26. The more people you have in the loyalty loop... ...the more they can positively influence those in the Evaluation stage
- 27. So... We should be careful when calculating one customer as worth more than another
- 28. Doing so risks neglecting the true „lifetime customers‟ who are influencing their network every day
- 29. Some people might buy little, but influence a lot...
- 30. So...what is a „lifetime customer‟?
- 31. • Someone who may or may NOT be a customer • Someone who cares • Someone who tells people they care
- 32. So what do we do about them?
- 33. Find them. Look for the signals that an evangelist gives off... (they might be different from the signals you‟re currently looking for)
- 34. Define the behaviours that constitute a „fan‟ or your company... ...they might be difficult to spot at first
- 35. Automate the search for these behaviours, and set them as triggers...
- 36. Impress them Shockingly good service Personalised messages Timely and targeted content
- 37. It‟s not easy to get people to „love‟ you...
- 38. You have to go „above and beyond‟...
- 39. In digital terms, that means clever nurture strategies, tied to intelligent and sensitive content and campaigns
- 41. And.. turn mere „repeat customers‟ into lifelong, unpaid, trusted salesmen...
Editor's Notes
- There’s an abundance of formulas for calculating the lifetime value of customer. We could start to define some key metrics, and think about how to incrementally improve on them, squeezing more value out of existing customers, and gradually extending lifetimes. But I wonder if any of this is really finding and catering for ‘lifetime customers’? Equally there’s thousands of strategies for encouraging customers to buy more often, and to stay as regular customers for longer...
- Obviously, we should be measuring repeat purchase, encouraging people to revisit our brand often, and incrementally growing the value of individual customers over a long period of time.. But...
- Although we can measure a huge amount of customer behaviour, a lot the characteristics make up a ‘lifetime customer’ are harder to measure. We may be looking in the wrong places...
- What if our current measurements are failing to pick the characteristic signals given off by real ‘lifetime customers’...
- For instance, we might not be able to recognise lifetime customers through measuring repeat purchases or indications of intent... Significant proportion of lifetime customers might be more ‘undercover’
- A lot of the traditional business intelligence measurements will (understandably) fail to pick up the signal given off by these people...
- There are lot of people out there who may love you brand. They may be constantly recommending it to their friends and family? Are we catering for these people properly with our repeat purchase strategies, and lifetime value plans?
- Give examples of ‘fans’. Products, apps, brand, etc that inspire loyalty – not necessarily connected to lots of repeat sales...
- Some one who buys the products a lot might not be a true ‘lifetime’ customer who loves the brand. Equally, someone who buys/uses infrequently may be die hard fan.
- Here’s a traditional purchase funnel. It follows the journey of customer. They buy a product from your brand, and the brand makes money from the sale. That’s a good thing, so we naturally want to repeat this, more of a good thing is better right?
- Here’s a traditional purchase funnel. It follows the journey of customer. They buy a product from your brand, and the brand makes money from the sale. That’s a good thing, so we naturally want to repeat this, more of a good thing is better right?
- Here’s a traditional purchase funnel. It follows the journey of customer. They buy a product from your brand, and the brand makes money from the sale. That’s a good thing, so we naturally want to repeat this, more of a good thing is better right?
- This process shows customers moving through to purchase, based on their expectations, and influences such as friends and family. These are BIG influences. These recommendations carry a weight that far outweighs marketing. Once people get into the loyalty loop they can start heavily influceing the people in the Evaluation stage...
- Here’s a traditional purchase funnel. It follows the journey of customer. They buy a product from your brand, and the brand makes money from the sale. That’s a good thing, so we naturally want to repeat this, more of a good thing is better right?
- Here’s a traditional purchase funnel. It follows the journey of customer. They buy a product from your brand, and the brand makes money from the sale. That’s a good thing, so we naturally want to repeat this, more of a good thing is better right?
- Defining these behaviours and the way you search for them is for another talk...but should be specific to your company.
- Defining these behaviours and the way you search for them is for another talk...but should be specific to your company.
- Defining these behaviours and the way you search for them is for another talk...but they should be specific to your company.