by Phil Huzzard | Oct 31, 2019
3 ways to increase the lifetime value of your customers
As one of Melbourne's leading advertising agencies, we've demonstrated that increasing the lifetime value of a customer can be a highly effective strategy.
Did you know that new customer acquisition can cost up to 7x more than retention of existing customers? Yet, many companies focus on converting new customers and end up losing existing customers. Internal research from social analytics platform Sum, found that all businesses with 40% repeat customers generated nearly 50% more revenue than similar businesses with only 10% repeat customers.
DPR&Co have identified three ways inbound marketing can help to up-sell and retain existing customers.
3 inbound activities that increase the lifetime value of your customers
With inbound marketing and sales, it is easier than ever before to sell more to your current customers. How? Simply by providing them with continuous value.
1) Create “delight” content for your existing customers
There’s a reason for the last step of the inbound methodology: the delight phase. This is meant to ensure that companies don't forget their existing customers.
In the delight phase, your company should aim to create content that is of value to your customers – not prospects or leads. There are several ways to distribute content of value to existing customers but we’ll include the following three: email marketing, marketing automation with smart content and social media.
With email you can send them tips on how to get the most out of your service or product, new product features you recommend they try out, invite them to exclusive events and send them relevant and useful content.
You can also send them surveys to find out what they are interested in receiving information about and ask them for specific content ideas or training sessions that you’ll cover.
Marketing automation, on the other hand, is the perfect way to follow up existing customers with exclusive information and making sure they always receive something of value. In other words: it helps you not to forget your customers.
Here you can invite them to attend webinars and online training or you can make them take part in advocacy marketing, meaning that you get your existing customers to publicly advocate for your company and products.
Last, but not least, you can use social media to promote events, webinars and online training. You can also use social media channels to keep your customers updated on company news or publish interesting case studies.
2) Create a Loyalty program
Rewarding and recognising your customers will take you a long way – as long as you do it the right way. It doesn’t matter how much money you put into creating a loyal customer base if your customers don’t feel like you provide any value to them.
Therefore, the first step is to create valuable content that is useful for them, as explained in step one. Then you can start involving them in your work by letting them be your company ambassadors and giving them something in return.
For example, if they help you with advocacy marketing, you can provide them with a “portal review”, which is an analysis of the HubSpot portal and what actions can be implemented in order for them to get an even greater value of their investment. You can also let them try out new products or product features for free and get their feedback, or get additional support from your company’s consultants.
3) Lower the marketing cost by only marketing to qualified prospects
This is the very core of inbound: reaching out to the right people with the right content at the right time. If you stop marketing to low-value prospects and focus your marketing initiatives in the channels that give you the most qualified leads at the lowest cost, you’ll reduce the marketing costs.
To identify the prospects your company want to attract in order to get enough customers, we recommend that you find out who your personas are. These are the people that will provide your company with money and who is a good fit when it comes to collaboration.
Break these people down into semi-fictional characters to identify how they make their decisions, what motivates them, what goals they have and what their pain points are. You can read more about personas and how to identify them here.
With inbound marketing and sales, you are able to build long-term relationships, offer new products and answer all the questions your existing customers might have. This will make them feel valued, seen and always guided in the right direction. This will help you up-sell, cross-sell and thus increase the lifetime value – and total revenue. Want to dig deeper into the ROI you can achieve with inbound marketing and sales? Download our starting kit consisting of an ROI calculator and a checklist for inbound success.