In any transformational growth strategy your marketing needs to be both measurable and engaging. In BE Social we covered the engagement side. Our Marketing Insight solution covers two distinct aspects of the measurability part.
1) Why customers buy and don’t buy. Customers buy simply because of two methods the brute force method (Product/Solution is 10x better etc) or because your product or solution has a minimal resistance to change (Apple iPhone 5, over Apple iPhone 4. It was easy to transfer data via iTunes and be up and running quickly).
The two methods are outlined below.
The Brute Force Method
- Make the product 10 x better. – (Digital Camera versus Film Camera, you can see pictures immediately)
- Eliminate the old. – (Windows 2000 operating system was discontinued, forcing migration to newer platforms and new application upgrades)
- Prepare for slow adoption. – (DAB Radio)
Minimise the Resistance to Change
- Make backward compatible. – (iPhone 3, iPhone 4, same power connections therefore same accessories and simple iTune upgrade path)
- Find buyers who greatly value innovative features (and/or don’t value existing features) – e.g., electric cars on islands & other remote places.
- Find first time buyers/users who are not yet endowed with features of existing technology. – (Betamax and VHS Video recorders).
So understanding your marketing strategy and what will make your product/service win is a critical part of transformational growth. At CapableCore we guide you and help you to make your product/service a no brainer.
2) Calculation of your Customers Life Time Value. Everyone talks about customer lifetime value, but few have actually calculated it or use it. The process is not that difficult. We help you become an expert. In the first place, what is customer lifetime value? It is the expected profit that you will realise from orders to a customer in the future. Although it builds on the past history of the customer, LTV is all about the future. It is based, primarily, on the customer’s expected retention and spend, plus some other factors that we help you to determine, such as acquisition cost and contract lifetime.
- We need to know the value of our customers, so as to properly target our sales and retention efforts.
- We need to discriminate among our customers to acquire and retain the best.
The Importance of Measurement!
- Measures determine vision and strategy. Deciding what to measure and how to link measures to incentives are the most important budget and management decisions.
- NPV (Net present value) of your customer base should be at the top of the measurement hierarchy.
The Purpose of Customer Life Time Value
- Where to put your retention pounds
- The value of each retention strategy
- Where to put your acquisition pounds
- How much to spend on acquisition
The integration of an effective Customer life time value metric into your corporate reporting is a key part of an transformation growth strategy. Simply it helps to define were you play and who you engage with and allows your to reward loyalty in a measured way at CapableCore we guide you and help you to make CLTV an integral part of what you do.