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Use Customer Lifetime Value to Find More Clients

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Use Customer Lifetime Value to Find More Clients


With new privacy rules continually changing the landscape of third-party data, brands are increasingly becoming more focused on understanding their current customers in order to make more sophisticated marketing decisions. One approach to this is utilizing customer lifetime value (LTV) to segment your best customers and ultimately find more of them. In this article, we’ll provide a brief outline of LTV but you’ll want to attend Hero Conf 2022 in Austin, Texas for a more in-depth breakdown with key takeaways.  

What is customer lifetime value?

The lifetime value of a customer, or customer lifetime value (LTV), represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. 

*Note on calculating LTV*

Now to be fair, there are a number of varying ways to calculate LTV going from relatively simple, to complex and complicated. This article will not be focused on evaluating the best approach or even how to calculate LTV.  I do have some preferred tools which I’ll share at Hero Conf- but ultimately finding the best tool that works for your brand is important. 

Large brands like Amazon and Starbucks have documented how their understanding of LTV has influenced their marketing and overall business decisions. Smaller brands who often have limited resources in their pursuit of growth often overlook LTV or don’t truly appreciate how helpful it can be to their overall growth.

Which campaign is performing better?

Take a look at the chart below – at a glance – which campaign appears to be performing better?

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Campaign A Campaign B
Clicks 2,000 2,000
Purchases (Conversions) 1,000 780
Cost/Click (CPC) $5.00 $6.50
Cost $10,000 $13,000
Cost / Acquisition (CPA) $10.00 $16.67

Most digital marketers, including myself, would say campaign A.  More purchases (revenue), lower CPC, and lower CPA. Seems pretty obvious. 

But a question that’s worth asking is – what if campaign B focused on acquiring a better quality customer?  Someone who purchased a higher average amount bought more frequently, and stayed, is a customer of the brand for a longer period of time.  Ultimately, a customer with a higher LTV.  The question of which campaign is performing better looks a lot different when LTV is factored as a metric and could lead to very different marketing approaches.  

Looking beyond CPCs & CPAs

These are conversations that more brands should be having. Looking at CPCs, CPAs and the revenue from the first purchase are all very common KPIs, but they can be misleading and myopic. Factoring in LTV provides a more holistic approach to making marketing and overall business decisions.  

Going a step further, brands that decide to utilize LTV often come across the hurdle of how to efficiently segment their best from worst customers. In the workshop, I’ll share the most effective analysis that we’ve found.  For brands on Shopify, we’ll take it a step further and offer a valuable app that will both help solve LTV and segment your customers as well.  There are a number of apps in the Shopify App Store that can help calculate your LTV and effectively segment your customers for you, but there’s one that we’ve found to be leaps and bounds ahead of the rest.   

Finally, once you’ve segmented your customers, you now have the ability to supercharge your marketing efforts to find more of your best customers, while also excluding targeting anyone who you believe might be exclusively bargain hunters or cherry pickers.  

Summary

If you’re interested in scaling your brand, you’ll want to attend this workshop.  Understanding LTV and how to find more of your best customers will be an invaluable tool that will help move the needle for your brand in 2022.  Key takeaways will be: 

  • How LTV has shaped the decisions of large brands we all know
  • How LTV provides a more holistic picture of success within paid search
  • How we’ve helped a women’s apparel and homeware brand find more of their ideal customers
  • Tactical insights (including apps/tools) on how to implement an LTV strategy within paid search

Hope to see you there!





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Three Key Moments You Can’t Miss at Hero Conf London 2022

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Three Key Moments You Can't Miss at Hero Conf London 2022


Have you noticed how your productivity increases when you take a few seconds to read a powerful inspirational quote? Now, imagine how it would be with three 45-minute industry-targeted keynotes led by three renowned industry experts!

Here’s what you’ll take away from the Hero Conf London 2022 Keynotes.

Kirsty Hulse will inspire you to increase confidence, take risks, and get more done with her Keynote “Brave Marketers.” Together you’ll learn…

– How to regulate nerves before pitches, meetings, and calls.

– Practical ways to believe in yourself and your skills.

– Increase buy-in and engagement when presenting to clients or stakeholders.

Frederick Vallaeys‘ Keynote was a successful homerun at Hero Conf Austin 2022! Now it’s your turn to learn “The Anatomy of the Modern Marketer.” You’ll discover the many ways in which today’s marketers have evolved from the ones we networked with at the last Hero Conf London. 

You don’t get the nickname “Superhero of PPC” by accident. As a techno-optimist and advocate for the benefits of automation, Daniel Gilbert, Global CEO of Brainlabs, is ready to dive into the nitty-gritty to triumphantly mark his big return to Hero Conf. Hang tight, he’ll reveal the identity of his Hero Keynote soon!

Be prepared to walk away from Hero Conf London 2022 with new tactics and large doses of motivation, all aimed to awaken your inner Hero. Secure your seat today!

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