The Future Of Customer Engagement: How to Extend Lifetime Value
This event took place at Social Media Week in New York. You can get the SMW Insider Digital Subscription to access the full video of this event and 60+ other #SMWNYC sessions.
As humans, we would like to think our worth is infinitely priceless, but as marketers we know there is a price tag hanging over our heads, one that’s different for every business. That price tag is our own personal LTV, or Lifetime Value.
Dr. Jason Davis, founder and CEO of Simon Data, and Joshua Neckes, President of Simon Data, delivered a tremendously valuable presentation on Customer Lifetime Value (LTV). Dr. Jason Davis explains LTV simply by saying it is about zooming out and building a wider view of your customers.
Too often we are more interested in how many new clicks, conversions, new users, etc., we can obtain from our marketing efforts that we forget about the importance of maintaining our current customers.
Most marketers know the age old concept of the idea that it costs 10 times more to acquire a new customer than to keep an old one, but are we forgetting to put that into practice enough? The two bright men who run Simon Data, a customer-retention platform, reminded us that while acquisition over retention is more commonly our goal as marketers, it is just as important not to forget the overall lifetime value a customer has to each business.
In addition, that lifetime value should be calculated, recorded and cultivated in the best way possible. Jason comically added, “We are here today to evangelize retention.”
The inundation of marketing channels and the platforms we have to market on and measure today make for a very noisy digital space. Thus, it becomes even more important to standardize the practice of recording all those touch points with your consumers in one place.
Jason and Josh explained that the value is in ensuring all your data is in one place in one platform. Doing so creates the opportunity for a business to measure, experiment and optimize the LTV of consumers and their experience at all touch points, ensuring that there will be a better retention rate and more money staying inside of the business.
A critical first step to optimizing the LTV of your customers is implementing a uniform recording practice across the organization of customer touch point data. Jason emphasized the importance of data hygiene for a business and investment in business intelligence tools to the audience.
Another key point relayed was the importance of the measurement of the moments for a customer, and those that separate one customer from another. The leave behind is, measuring those key customer moments is important, but how you use those moments is even more so. Josh said it succinctly, “Understand the macro, optimize for the micro.”
The science slip peaked from underneath the marketing skirt when Jason and Josh talked about the part of this process grounded in starting with a solid hypothesis about your data coupled with the need to be able to define experiments to test those hypotheses.
A/B testing is hot right now, but Jason and Josh say you should do some “hold-out testing”. For example, if you are running a campaign for a digital ad, where you hypothesize that people who bought sweaters previously do not like ads for pants, then test this in an experiment, and make sure to have a control group in which you do not apply the experiment.
Like in all science experiments, it is imperative to measure everything! Clearly, marketers need to pay attention to metrics to measure performance. However, making sure we delve deeper into the data to understand what happened, rather than only if a consumer saw something, is key. “It’s important to measure more than just ‘if the customer saw it’” said Jason.
Hold on to your hats digital marketers, lest I forget to share the, as promised, ‘secret channel for delivering high value e-commerce sales’. Drumroll please… It’s DIRECT MAIL! Yes, snail mail is making a comeback, but remember it has its place and value for a particular segment of your customers, not for everyone. Now, go fourth and choose wisely, marketers.
Lastly, Jason and Josh closed by highlighting the need to automate core lifecycle campaigns and suggested that we shouldn’t be disheartened by how hard it can be to automate a campaign. It is a grueling process to create, but its value can be resounding.
Don’t underestimate the value of each relationship. Get smart enough to know that dollar value of the relationship and how you can cultivate that relationship to work for you.
About Simon Data
Simon is a tool that transforms your data into clear insights that let you get more out of your marketing. Connect your data in minutes, create customized segments, deploy to existing channels, and discover what your customers want.
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