You’ve got an amazing product that solves a major problem for your customers, but how can you be sure that they’ll keep paying for it? What if they decide they don’t need your product any more and unsubscribe? Do you throw away all that paid-for customer data? How can you get them to recommit?
The answer may be to find a way to make their experience with your product more valuable than the actual purchase. What if you could show them how much they’re getting for free? What if you could entice them to stay subscribed by making it look like it’s a one-time event, when in fact it’s a recurring cost that they’ll want to ensure they continue to benefit from?
This is where marketing analytics come in handy. By examining your existing customers’ behaviour and understanding the value that you’re providing, you can work out a more effective marketing approach, identify areas for improvement, and prove the impact that your marketing has had on encouraging specific actions or results. In short, it’s all about measuring the results of your digital marketing efforts and adapting your strategy to maximize those results.
One of the first things to do is segment your customers. This is important because it will help determine what kind of product or service you should be offering them – e.g. do you need a subscription for the product, or can they simply purchase the item once and then use it as needed?
As a general rule, creating customer segments that are too fine may result in lost revenue when it comes to subscription-based businesses. However, there is also the opposite problem – if you create too many segments, you won’t be able to tell which ones are the most important, and you’ll end up wasting time and effort pursuing unimportant leads. The key is to find that sweet spot where you can accurately identify key segments within your customer base, and then focus your efforts on pursuing and retaining them.
Understand The Value Of Your Customers
So, you’ve created these amazing customer segments that you feel represent a key part of your customer base. Great! But now you have to find out precisely what they’re worth. Fortunately, you’ve got a tool at your disposal that can help you do just that.
The first step is to look at how much money each one of your segments is currently spending with your product or service. To do this, simply go to your Marketing Analytics platform and navigate to the Customers section. From here, you can select the appropriate plan (e.g. Free, Plus, or Pro) and segment (e.g. first segment, second segment, etc.). Once you’ve done this, you’ll see a graph showing the amount of money that each segment has spent with your product over time. From this, you can gain a clear understanding of the value that each one of your segments brings to your business.
Determining Your Customer’s Lifetime Value
You can’t determine how important a particular customer is to your business based on a single purchase or trial. To truly understand the value of an individual customer, you have to look at all they’ve purchased from you, or sponsored (e.g. gotten discounted pricing or received special offers for), over their lifetime. This is where CRM and marketing automation platforms can really help.
The first step in this process is to use marketing automation to collect data on all of your customers, regardless of whether they’re currently active or inactive. This data will be used to construct a persona for each customer, which can then be used to determine their lifetime value. A good place to start is with a free trial of HubSpot, which can be accessed at hubspot.com. Once you’ve had a free trial or are a subscriber, take a few minutes to set up automated emails, calls, and text messages to collect data on how each one of your customers interacts with your business.
Creating Long-Lived Value
Once you’ve established the value of your customers, it’s time to create a plan to retain them. Of course, this is easier said than done, but by taking the time to do this up front, you can ensure that your business continues to grow and prosper. To create long-lived value, you need to look at three things: pricing, product, and experience.
As a general rule, pricing should be based on the value that you’ve established for each individual customer. If you want to see your customers come back for more, reduce the price of your product or service for them. If you want to see them spend more money with your product, increase the price. Easy enough, right?
Now, regarding the experience. In a nutshell, businesses need to provide excellent value to retain customers, and in order to do that, they have to be attentive to their needs, respond quickly to questions and feedback, and provide a good user experience throughout. This means that your product or service must be easy to use, convenient, and contain all the necessary features for the job. In terms of material goods, this usually means that you need to ensure that the product is of high quality and that it provides value for the money.
Monetising Customer Value
The last step is to monetise this value that you’ve created. Once you’ve got a clear picture of how much each of your customers is worth to your business, it’s time to look at how you can begin to grow your business, or expand into new areas, by monetising customer value.
You may decide to sell your customer’s personal data to third parties, such as advertisers or data brokers. You may also decide that, rather than continue to operate your business as you have been, you want to use the data you’ve collected to build a more successful venture. To do this, you may wish to set up a Special Discount for a limited time, or run an Introductory Offer where existing or new customers can get a monetary discount on your goods and services.
How Does This Connect To Digital Marketing?
It’s time to tie it all together. The general rule is: people don’t buy what you sell – they buy why you sell it. To be able to convince people to purchase your product or service, you need to be able to explain to them why it is that they should want or need what you’re offering. This, in turn, requires data.
So, from a marketing perspective, you now have a clear picture of your customer base, their value, and how you can begin to grow your business by providing excellent value to current and potential customers. It’s time to take action.