CUSTOMER LOVETIME VALUE, SPREAD THE LOVE!
When you, like us at Fanly, are dealing with cloud-based platforms for loyalty, engagement, and payment, the question often is: will this technology boost our revenues? A simple answer is yes, but the truth is somewhat more complicated. But it’s also much more exciting. The key metric to look at is Customer Lifetime Value, or Customer Lovetime Value, as I sometimes like to call it. Loyalty and engagement are the tools to really get to know your customer. If you know your customer, you can build a relationship. So, in any case this will sound like a love story. If you do it right, that is.
Collect the data
In a world where retail chains seem to file for bankruptcy on a weekly basis, the big question seems to be: how do we get clients into the stores? Assuming brick & mortar retailers are losing a battle against their online competitors (which by the way is only partially the case) it is interesting to see what differences there really are between the both. Amongst a lot of other things, the big advantage of the online players is the collection and usage of client data. If you know who your client is, what they look at before buying something, what their age is, how often their choice of payment fails, which other websites they visit and how often they return to your online shopping platform, you have all the metrics to start building a relationship. When you work in a high-street store, you might recognize someone after a couple of visits, but do you really know him or her? I doubt.
That is where technology comes in. Almost every bit of technology that is used by Amazon or any other online retailer is also available for ‘traditional’ retailers. You don’t need all of it, but if you use the technology to get to know your client, communicate with your client whenever convenient, invite him into your store for personalized offers based on actual knowledge and let him pay with seamless mobile payment options out of your own app you have all the weapons to win the fight.
Get to know your customer
Loyalty programs are no longer a nice-to-have extension to the customer journey in retail. In 2019 you should consider a platform for loyalty, engagement, and payment a full part of the modern customer journey. And advanced technology and data analysis are not reserved for e-commerce companies. Like with a good love story it is everybody’s right to get to know each other, build a relationship and eventually fall in love. And there you are: the retailer with the knowledge, the data and the client that has become a brand ambassador.
Did this blog post actually start with Customer Lifetime Value and then get distracted by a love-story? Perhaps, but in the end, this story is just precisely about that: by building this relationship and using these tools (and processing the data generated) your brand-new KPI has become measurable and influenceable. There are plenty of ways you can calculate the CLV (weekly, monthly yearly) and you’ll see it’s much more fun treating a customer based on lifetime value than on single visit spend.
Good examples? As (almost) always Starbucks sets the pace: They have calculated the customer lifetime value per client at $14000 which means they have calculated that an average love affair with their clients is set to last for years and years (Twenty, according to Starbucks). By looking at it this way, you start realizing that marketing isn’t the art of getting a $5 coffee sipper into the Starbucks but about acquiring a $14.000 client. So, it’s love well paid for! So what’s the CLV in your business, and how are you going to influence it positively?
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