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A top-notch online customer experience is very important for boosting Customer Lifetime Value. It makes customers happier, more likely to stick around and more loyal. Plus, it opens up opportunities to sell them more products. To pull it off, you have to be tech-savvy and have a flexible system that can adapt to what customers want.
In the latest CN webinar, we asked Sean Daley, Head of Experience Strategy at Pivotree, and Dan Shim, Head of Product Marketing at commercetools, to teach us about customer lifetime value and strategies to create loyal, repeat customers. Then, they were joined by executives from The Vitamin Shoppe and Kendra Scott who shared insights about what they have been doing to optimize customer experience and maximize customer lifetime value.
WHAT WE LEARNED:
- Customer lifetime value has become more complicated recently and it is more important than ever to adapt to what your customers want.
- Optimizing customer experience is vital to building a strong customer relationship based on more than just transactions.
- It is important to determine what aspects of your business you need to prioritize and work to improve and what aspects are doing well can be deprioritized.
- Nadina Guglielmetti, VP & General Manager, Marketing, The Vitamin Shoppe
- Chris Hardisty, Senior Vice President, Ecommerce, Kendra Scott
- Dan Shim, Head of Product Marketing, commercetools
- Sean Daley, Head of Experience Strategy, Pivotree
- Moderated by Jill Dvorak, Chief Content Officer, CommerceNext
1. CLV: Complicated but Crucial
Knowing the customer lifetime value is crucial for businesses as it helps them predict how much revenue they can expect from a customer over their entire relationship with the company. By having an accurate customer lifetime value, companies can make informed decisions on how much they should invest in acquiring new customers and retaining their current ones. This information also helps businesses optimize their advertising, improve customer experience and enhance their products or services.
The Vitamin Shoppe recognizes the importance of customer lifetime value and regularly updates their strategies to ensure that they provide customers with an experience that encourages them to keep coming back. Amid the current uncertainties, they strive to not only meet customers’ needs but exceed their expectations.
Similarly, Kendra Scott stresses that examining net profit instead of just the spend per customer is crucial. A high customer lifetime value indicates not only the customer’s value to the business but also their loyalty and how well the brand is meeting their expectations. By understanding customer lifetime value, businesses can make smart decisions to maintain their customer base and maximize their profits.
2. Building Customer Relationships
Strong customer relationships are crucial for a business’s success. Loyal customers are more likely to recommend the brand to others, spend more and remain loyal even in difficult times. A positive customer experience can convert a one-time buyer into a repeat customer. Customers who feel valued and appreciated are more likely to have a positive opinion of the brand, which leads to good word-of-mouth and a better reputation.
One way to do this is to make shopping enjoyable and as easy as possible for customers. The Vitamin Shoppe is doing this by making in person shopping feel special by providing a localized experience. They aim to establish a customer relationship that goes beyond mere transactions; they want to become a permanent part of their customers lives.
Pivotree recommends creating a real time inventory system so customers instantly know what is in stock and where they are able to purchase it. To compete with large companies like Amazon, commercetools believes that it is vital to have an easy and hassle free return system so that customers are more willing to try your product and feel more secure in their purchase.
Due to the current economic uncertainty, customers are becoming more selective about what they choose to spend their money on. Creating a rewarding customer experience will make them more likely to become loyal customers, leading to higher customer lifetime value.
3. Prioritization vs Deprioritization
While every business has something they can improve on, it is important to decide what is the most important to work on to avoid losing focus. When implementing a new business strategy, Pivotree adds the new features fast, diligently, but in small steps to ensure that they can gauge progress and success. Though it can be frustrating if something does not work out as intended, it is vital to shut down changes that are not working and move on. Learning from mistakes is far better than trying to keep something that has no chance of working alive.
Additionally, if something isn’t broken, don’t try to fix it. Instead of trying to optimize something that is already successful for your brand, commercetools explains that it is better to work on what is lagging behind. While prioritizing what you want to work on is important, deprioritizing things that are working fine already is even more crucial to long term success.
By determining what needs to be worked on and what is already succeeding, you can spend more time focusing on improving your customers’ experience and customer lifetime value.
In conclusion, the key to maximizing customer lifetime value is to create positive customer experiences. By prioritizing customer relationships, examining customer lifetime value, and making strategic decisions about what to focus on, businesses can ensure that they are providing the best experience for their customers. With the current economic uncertainty, it is more important than ever to adapt to what customers want and build strong relationships with them.
Want to learn more about strategies for ecommerce growth and building customer relationships? Don’t miss the opportunity to learn from over 120 industry experts at the CommerceNext Ecommerce Growth Show, taking place in NYC this June. Register now!