Retain and Grow Your Customers
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Bravo, you just got a new customer! Marketing is done, right? Wrong! In the final presentation of our Marketing How-To Series, find out why you need to continue marketing to your current customers to keep them coming back for more. Key topics include: How to increase your customer lifetime value Make your customers do the marketing for you by creating advocates Best practices in rewarding your loyal customers
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Retain and Grow Your Customers
- 1. Retain and Grow Your Customers Mike Stocker @michaelstocker Director, Business Development
- 2. @vidyapc Agenda • Engagement Marketing is Key • Challenges • What is CLTV? • Lifecycle Marketing • Customer Case Studies • Conclusion
- 3. @vidyapc The Quest of Every Marketer YOUR CUSTOMERS
- 4. Acquire Engage Retain & Grow • Drive more inbound website, app downloads • Convert visitors to new customers • Right message • Right time • Right channel • Earn more customers • Grow customer lifetime value • Create more advocates Are you thinking about the entire Customer Lifecycle?
- 5. @vidyapc Acquire Engage Grow Ads Email and Mobile Web
- 6. Amidst Massive Transformation in Consumer Engagement Mass Marketing Focus on the message Transactional Marketing Focus on the transactions Engagement Marketing Focus on long-term relationships
- 7. @michaelstocker ENGAGEMENT MARKETING Build personalized and lifelong relationships #1 – As Individuals #2 – Based On What They Do #3 – Continuously Over Time #4 – Directed Towards An Outcome #5 – Everywhere They Are
- 8. @michaelstocker Marketing is becoming the steward of customer journeys
- 9. @michaelstocker The Digital Marketing Challenges • Dealing with Fragmented Tools & Data Silos • Limited Visibility into the Customer Journey • No Ability to Measure Cross-Channel • No Digital Marketing Effort ROI • No Customer Lifetime Value • Lack of Lifecycle Marketing “82.2% of marketers do not have the ability to measure cross-channel performance or return on investment.” Laurie Sullivan Multichannel Marketing
- 10. The Golden Metric – Customer Lifetime Value
- 11. Think about Customer Lifetime Value as a gym membership… Gym Membership Alone Revenue Contract Length 23 Monthly Charge $25.00 Membership Revenue $575.00 100% Revenue $575.00 Retention Rate 50% Discount Rate 5% Customer Lifetime Value $522.73 CLV = Profit ($) * Retention (%) / (1 + Discount (%) – Retention (%))
- 12. But there is more to Lifetime value
- 13. Think about Customer Lifetime Value as a gym membership Gym Membership Alone Plus Upsells Revenue Contract Length 23 23 Monthly Charge $25.00 $25.00 Membership Revenue $575.00 $575.00 Trainer ($80/month, 3 months) $240.00 Specialty Classes ($10/month) $230.00 100% Revenue $575.00 $1,045.00 Retention Rate 50% 50% Discount Rate 5% 5% Customer Lifetime Value $522.73 $950.00
- 14. The Loneliest Customer Metric But Why?
- 15. Now add in the Cost Per Acquisition Cost Per Acquisition Life-Time Value
- 16. Balancing CLV and CPA Track and Adjust your marketing spend until your CPA is optimized with your CLV
- 18. Page 18 © 2014 Marketo, Inc. @michaelstocker
- 19. Page 19 © 2014 Marketo, Inc. @michaelstocker It’s not just about acquisition – It’s about the Customer Journey
- 20. Page 20 © 2014 Marketo, Inc. @michaelstocker
- 21. Page 21 © 2014 Marketo, Inc. @michaelstocker A Good example of an ongoing engagement: I purchased pants called “Jet Blues” on Bonobos.com and they sent me an email referencing that prior purchase and suggesting a matching shirt.
- 23. RedStone Federal knows that when their customers are more engaged and upgrade their accounts that their total customer lifetime value will increase. With this valuable information, RFCU can use CLTV metrics to justify: Additional customer acquisition New branch openings Customer education on new products and services Results RFCU has been able to create a true content marketing strategy Success was so overwhelming, marketing had to slow campaign emails because of too many conversions In 7 weeks, the campaign hit 1/4 of annual online revenue goals 140,000 email sends with 2,400 content downloads, 5,500 new or upgraded accounts
- 25. Page 25 © 2014 Marketo, Inc. @michaelstocker Example 1:
- 26. Page 26 © 2014 Marketo, Inc. @michaelstocker “Consistently sharing relevant content is a key component of our mission, but it can be infinitely challenging when you have tens of millions of users across multiple channels. Marketo helped us address this significant challenge, gave us the ability to scale and helps us leverage things like personalization, analytics and segmentation to deliver the right content to the right people at the right time.” ~ Tara-Nicholle Nelson, Vice President of Marketing
- 27. Page 27 © 2014 Marketo, Inc. @michaelstocker world’s most popular health & fitness app 65 million users 15 languages #1 on iTunes, Google Play Stores last 3 years Top 10 in 65 countries 12 billion foods 50 billion calories burned via API 28 million recipes 150 million+ pounds lost
- 28. Page 28 © 2014 Marketo, Inc. @michaelstocker MyFitnessPal- Before Marketing Automation • In 2012, MyFitnessPal sent 1 email to their user base • In 2013, MyFitnessPal sent 4 emails to their user base • Prior to Marketing Automation, emails had to be created by Engineering resources
- 29. Page 29 © 2014 Marketo, Inc. @michaelstocker MyFitnessPal Strategy • Begin more regular communication with users • Phase 1: Relevant, Personalized Email • Phase 2: Push notifications/In-App messaging • Build a community: • “Hello Healthy Blog” • Facebook and Twitter
- 30. Page 30 © 2014 Marketo, Inc. @michaelstocker Examples of MyFitnessPal communications:
- 31. Page 31 © 2014 Marketo, Inc. @michaelstocker Results: Customers loved the engagement!
- 32. Page 32 © 2014 Marketo, Inc. @michaelstocker
- 33. Conclusion:
- 34. Increasing CLTV: The Challenge & Solution The Challenge The Solution • Fragmented Tools & Data Silos • Poor Visibility into Customer Journey • Don’t Understand Behaviors and Context • No Cross-Channel Measurement • No Digital Marketing ROI • Lack of Lifecycle Marketing • Track the Complete Journey • Anonymous Web Surfing • Prospect Nurturing • Customer Lifetime Value • Attribution for Every Step • Give credit as appropriate • Don’t lose sight of the value of each touch • Optimize Digital Marketing for the full, tracked cycle
- 35. Best Practices for Growing Customer Lifetime Value • Understand your CLTV • Customer Satisfaction • Tailor product/Offerings • Engagement Marketing • Good User Experience • Build Habits • Make Metric/Data Driven Decisions
- 36. @michaelstocker Grow Your Customer Lifetime Value Mike Stocker @michaelstocker Director, Business Development
Hinweis der Redaktion
- Plain old email marketing just doesn't cut it anymore. Easy and powerful marketing automation software can help you engage your audiences in relevant, 1:1 conversations across the channels of their choice, and drive impressive bottom line results fast. First webinar of the Summer Marketing How-To Series, Graduate… We also have specific webinars in the series focused on how to Acquire, Engage prospective customers and Grow their lifetime value.
- All marketers, irrespective of the type of company they work for - B2B and others from B2C businesses, across industries and verticals, have the same quest: How do I acquire new customers faster? How do I grow their lifetime value? And, how do I convert as many of them as possible to become advocates? How do I build brand advocates who in turn can influence new prospects? In other words, create this unstoppable virtuous cycle of customer success.
- Typical buyer journey… Target/Find potential customers and Attract them to you by getting them to click on an ad. This of course happen at the TOFU. Engagement Marketing covers the entire process, but today, rather than using paid channels to Find and Attract potential customers, it relies primarily on unpaid channels, such as content marketing, SEO and social, for example). But the key difference is that engagement marketing deals with the entire buyer journey across multiple channels Marketo, will have rich customer profiles detailing who they are, where they work, how they behave, what their interests are and how ready they are to buy. So, the business situation is that 1/4th of the marketer’s digital marketing budget is going to online advertising and 95% of that spend is wasted on the wrong audience while a treasure trove of rich customer data exists in their Engagement Marketing Platform like a pot of gold at the end of a rainbow! Need: Activating customers, maximizing customer lifetime value, creating more advocates Solution: Get a clear picture of each customer Build trust, loyalty and advocacy with only relevant content showing that you understand them “While we’re engaging with consumers, we’re continuing to learn more about them. Which messages resonate with them? Are they opening your emails? Are they coming to your website? Are they tapping push notifications? All of this data comes together to provide the clearest picture of your consumer – which you can use to grow your relationship with them, whether that means buying more or advocating to their friends.”
- The listening and responding power of MA comes alive through several powerful features. Whether it’s SEO, Nurturing, Facebook integrations, Mobile App engagement, and Analytics we give you everything you need to grow your business and acquire and grow customers. Example: A customer searches for something on the internet, clicks and visits your site. They leave the site and are retargeted with your ads They return to the site and sign up for the newsletter They receive emails and download the app They add a product to shopping cart, but don’t checkout They receive an email to return to finish shopping They don’t open email, but in the app they receive a notification for 10% off today only They don’t click, so they’ll see a Facebook ad targeting them to return They purchase A few weeks later they receive more targeted content and messages based on the type of product they are interested in.
- Because we are amidst massive transformation in the consumer engagement world. In the last few years alone we have moved from Mass Marketing to marketing that focused on the transaction. We are now in the Era of Engagement Marketing –where companies that win are shifting from marketing AT consumers to engaging WITH them to build meaningful and lifelong personal relationships.
- Marketo
- Given that there is lots of noise, the customer is self-directing their journey and the customer wants a personal interaction at every point of their journey, it’s now up to marketing, more than any other business function, to become the steward of the customer journey.
- The Problem Today, we are using excel spreadsheets Why is understanding the customer journey important?...
- Presenter: Mike Notes: Definition of CLTV- To start, it’s a good idea to define CLV. The Marketing Accountability Standards Board (MASB) defines customer lifetime value as the present value of the future cash flows attributed to the customer during the entire relationship with the company.
- Presenter: Mike Quick easy example: An easy example would be the lifetime value of a gym. They recruit a member who spends $25 every month for 3 years – and he got the first month free as an incentive to sign-up. The value of that customer would be: $25 X 23 months = $575 in total revenue. The gym has a 50% drop out rate over the 3 years, shown as the retention rate. The discount rate is 5% - using that as the rate to determine the time value of money. So the resulting Customer Lifetime Value is $522.73 – as long is our cost of marketing per new customer is less than $522.73 we can afford the marketing plan. Now you can see even from this hypothetical example why many gyms offer a free starter membership to help drive traffic. Gym owners know that as long as they spend less than $240 to acquire a new member, the customer will prove profitable in a short amount of time. You can also upsell them the personal training, the classes upgrade etc.…
- Presenter: Mike
- Presenter: Mike So now lets go back to our math! Last time we calculated a CLV of $522.73. However, a deeper analysis shows that on average we can sell 3 months of private training over the 3 years. We also have a high utilization of specialty classes such as SPIN, Yoga, and boot camps. They are only $10 per month. Once we add in those two areas, our CLV increases from $522.73 to $950. Our abilty to invest in recruiting has gone up significantly with this new perspective. The wrong business decisions get made if you don’t track the full value of the customer.
- Presenter: Mike Challenges with CLTV, Why do Marketers tend to forget about it?-Mike An Untapped Business Development Opportunity- We all know retaining and growing existing customers costs far less than acquiring new, but for various reasons, sales professionals often show a preference toward new customer acquisitions and gaining new logos for their powerpoint decks. Sales reps and marketers often defer existing customers as they generate incremental sales, as opposed to net new customers which produce first-time, big ticket sales. However, it’s incumbent upon management to recognize that those incremental sales deliver a lower cost and higher margin per sale, grow customer share and increase customer lifetime value – metrics that often fail to garner attention for the sales team but are critically important to the company. Perhaps list examples here of why marketers struggle to rely on it? Do they not know how to track it? Do they not know what it is? Does it seem risky? Customer Lifetime Value- The Loneliest Customer Metric-Mike An untapped business development opportunity I’ve often referred to Customer Lifetime Value (CLV or LTV) as the loneliest CRM key performance indicator, which is particularly troublesome as this metric is forward looking, identifies both the degree of customer-centricity along with customer upside potential, and can be a catalyst for spurring increases in customer share, customer retention, margin improvement and top line revenues.
- Presenter: Mike The Relationship Between Lifetime Value and Cost Per Acquisition-Mike Not Knowing the Lifetime Value (LTV) of Customers Have you ever calculated the LTV for your customers? If not, there’s no way to know how much you can spend on AdWords per acquisition. Let’s say your LTV is $10. This means that you’ll earn $10 on average over the lifetime of doing business with your customers. If you’re paying $6 per acquisition, then you’re ok, because you’re making more per customer than you’re spending. But if you’re LTV is $4 and you’re spending $6 per acquisition, eventually you’ll go out of business. Now that we have gone through a deeper definition of Customer Value, lets go back to the definition of Cost Per Acquisition. Santi…
- Mike Finally, we then balance out the expenditures in each channel to ensure that we get the most bang for our buck. Some channels depend on others to fully perform. No digital channel is an island. That is the CAKE case study, Mike has another with one of Marketo’s clients…
- Given that there is lots of noise, the customer is self-directing their journey and the customer wants a personal interaction at every point of their journey, it’s now up to marketing, more than any other business function, to become the steward of the customer journey.
- This is more like what you want your communications to be….
- Given that there is lots of noise, the customer is self-directing their journey and the customer wants a personal interaction at every point of their journey, it’s now up to marketing, more than any other business function, to become the steward of the customer journey.
- Presenter: Mike
- How many of you listening today have MyFitnessPal installed on your device? Here is a little bit about the company.
- MyFitnessPal now sends 4 messages per week as compared to 2012 or 2013 with Marketo Marketing Automation. They send helpful good content around healthy eating, including recipes, exercise tips and tricks and messages about how to use the app. One of their strategies has involved Building out a community via their Hello Healthy blog (The MyFitnessPal app’s blog).
- Given that there is lots of noise, the customer is self-directing their journey and the customer wants a personal interaction at every point of their journey, it’s now up to marketing, more than any other business function, to become the steward of the customer journey.
- Presenter: Mike Customer Satisfaction: “one of the most effective ways to increase LTV is to increase customer satisfaction.” https://blog.kissmetrics.com/how-to-calculate-lifetime-value/?wide=1 According to Harris Interactive, 56% of customers will switch brands if the alternative offered more ways to connect. Good Customers: “sometimes it pays to invest in “good” customers” https://blog.kissmetrics.com/how-to-calculate-lifetime-value/?wide=1 Tailor Product/Offering: offer products and services tailored to your best customers Engagement Marketing: communicate over time, relevantly. Good User Experience: incorporate customer feedback to improve everything from user experience to product features and design Where should sales spend the most time on to acquire the good customers Build habits around your product http://conversionxl.com/how-to-build-habit-forming-products/ Cross-market & provide lead gen for companies with similar customer bases http://conversionxl.com/customer-lifetime-value/ make metric driven decisions The point is that you’ll never know how to develop an optimal marketing budget unless you know what the return on your investment needs to be. This knowledge is vital because it will help you make marketing decisions based on the reality of your own numbers rather than the promises of some new media program. http://www.entrepreneur.com/article/224153
- Plain old email marketing just doesn't cut it anymore. Easy and powerful marketing automation software can help you engage your audiences in relevant, 1:1 conversations across the channels of their choice, and drive impressive bottom line results fast. First webinar of the Summer Marketing How-To Series, Graduate… We also have specific webinars in the series focused on how to Acquire, Engage prospective customers and Grow their lifetime value.