If you’re currently working on coming up with an effective digital marketing plan for your eCommerce business, it’s important to understand what your business’ customer lifetime value is and how it can affect your business.
Marketing and Customer Lifetime Value:
What is customer acquisition cost formula:
Your customer acquisition cost is the total amount, on average that it costs your business to obtain a brand new customer. Keep in mind that this cost should include any applicable agency fees.
Why is your customer acquisition cost important:
If you discover that your customer acquisition cost is fairly high, you should work out your customer lifetime value in order to ensure that you get as much money out of each of your customers as possible.
What is your customer lifetime value:
If you’ve never heard of your customer lifetime value, simply put it’s the number of revenue that your business will obtain from a single customer throughout their lifetime. In general, you should try to increase your customer lifetime value so that you’ll be able to increase your profits without having to pay a high overhead in order to obtain brand new customers. As it’s a whole lot easier to retain customers who have already made a purchase through your business than to try and obtain brand new customers who have no history with your brand, business, products, or services.
How to convince your customers to continue dealing with your business:
If you’re curious as to how to retain your past and current customers, one answer is to focus your efforts on digital marketing techniques. For example, it’s well worth concentrating on creating effective marketing emails which you can send to individuals who have placed an order with your business in the past. As these individuals already have shown an interest in your business and its products and services and are highly likely to be tempted to make future orders with your eCommerce business.
Remember that in order to send highly effective marketing emails it’s important to personalize your emails using automated email software as if potential customers see their real first name in the subject area of your emails, they’ll be far more likely to make a purchase through your website. Also make sure that your marketing emails contain attractive, eye-catching photos as humans are visual creatures and will be far more interested in your brand new products, than if you were simply to write about your new products.
Use email analytics to see how well your marketing emails perform:
Don’t make the mistake of sending out your marketing emails only to forget about them. As if you use email analytics software in order to see how successful your emails are, you’ll be able to see which email techniques work and have a high click-through rate and conversion rate and which of your email marketing tips are ineffective and should be forgotten.
So if you’re interested in increasing your customer lifetime value and retaining as many of your current eCommerce customers as possible, it’s a great idea to action all of the tips which are listed above!
Infographic created by Fiserv, an omnichannel commerce company