Tracking ROI (Return On Investment) across campaigns and ad platforms allows marketers to measure the effectiveness of their marketing efforts. Allowing marketers to evaluate where they’re achieving the highest level of profitability.
But sometimes it just doesn’t work, right?
Usually it doesn’t work for companies who has low customer life time value (CLTV). You have accumulated so much data about your marketing and yet there is always some kind of ceiling that cannot be crossed.
If you want to reach more customers in a more cost-effective way, this blog post is made exactly for you.
LTV by Industry
Since the price of goods or services in every industry is different, the average CLTV will vary from industry to industry. Below is a list of different types of service businesses and their customer lifetime revenue.
|Industry||Avg. Customer Life Time Value|
|Business Operations Consulting Firm||$385,000|
|Digital Design Firm||$91,000|
|Financial Advisory Firm||$164,000|
|Commercial Insurance Company||$321,000|
|Healthcare Consulting Firm||$328,600|
In your case, Statistics won’t help
I hope you continued to read Because I found this table just to tell you that it not gonna help you!
Every business and every website has completely different numbers and when you try to rely on external sources for statistics is the worst thing you can do for your business! It will hold you back from testing and can even motivate you to start another venture.
How to measure Customers’ LTV like a pro
Customer revenue per year * Duration of the relationship in years – Total costs of acquiring and serving the customer = CLV
This formula is limited to one year only because if you will start to calculate the overall lifetime value of your business you might end up with a very big number that will give you the confidence to invest a lot of capital toward advertising and it can cause your business to bankruptcy:
If you will invest $100,000 in advertising in month #1 and after 12 months you are expecting to get your return on your investment should then you should be prepared that you need to wait 11 months with a small cash flow to survive.
There are many ways to measure CLTV in this only one of them if you want more in-depth consultant for your business you can schedule a free consultation with us here.
My Customers’ LTV is my destiny?
That’s right, some businesses have lower customer LTV but that doesn’t mean that these businesses are not good or profitable enough. That only means you need to find the right tactics for your business!
At this moment you have two options:
A. Increase your customers’ lifetime value.
B. Find new marketing channels for businesses with low customer lifetime value.
How I can improve my Customers’ LTV?
Invest in Customer Exprience
Customer experience is made up of every instance of connection between a customer and a brand, including store visits, contact center queries, purchases, product use, and even their exposure to advertising and social media.For example: improving the UX Writing experience is a business-wide endeavor that’s often addressed using a customer experience management program. This is a process of monitoring, listening, and making changes that add up to a lasting improvement in how customers feel and their tendency to be loyal over the long term.
Ensure your onboarding process is seamless
Customer experience starts the moment a potential customer encounters your website, but often companies can forget that customers need care after the purchase. Make sure your onboarding process is optimized for your customer’s needs, and it’s as simple and easy as possible for minimal customer effort. Personalization and communicating the extra value you provide to your customers should be a priority.
Remember the power of social media
Social media is increasingly important not only for customer communication but for customers to gather information on your brand and public image. If customers feel as though your social media responses to a query or issue aren’t fast enough, thorough enough, or empathetic, this will affect the opinion the customer has of your brand moving forward. Make sure you factor in social media – mentions, and responses into your customer experience strategy.
Recognize and reward your best customers
With your customer experience management program up and running, you’ll already have some ideas about which customers are likely to have the best CLV. You can nurture your relationships with these individuals or groups using targeted marketing and special offers that recognize their loyalty. This could include free expedited shipping, top-tier benefits in your loyalty program, or access to exclusive or pre-release products and services.
What are the best marketing channels for customers with low LTV?
Google Ads (Pay Per Click)
PPC – The fact that PPC can use advanced targeting options like location, interests, and device makes it even more effective for generating an impressive ROI. Generally, companies who use PPC advertising see an average return of $2 for every $1 spent. Use Google Ads, however, and your business will likely experience even higher returns.
Email Marketing – With an average ROI of $44 for every $1 spent, email marketing is renowned for its ability to generate an ROI. Email marketing serves as one of the highest ROI marketing channels because of its ability to personalize itself to a user and their wants, questions, and needs.
SEO (Search Engine Optimization)
SEO – Unlike PPC, you don’t pay when people click on your site, which helps SEO provide an impressive ROI. SEO also works well for generating ROI because it focuses on every stage in the buying funnel, from top-of-the-funnel to bottom-of-the-funnel users.
With SEO, you can reach more of your target audience and nurture them into becoming customers.
How do you calculate SEO’s ROI?
Let’s say your site generates 20 sales per month from organic traffic, with each sale worth $200, leading to a total of $4000. You’ve also invested in professional SEO services and dedicated around $1500 per month for those services. In this case, your ROI would be 166%.
While content marketing ties into SEO, there are distinct differences. A good content strategy can benefit a website immensely, one best practice to follow is; not bombarding your audience with selling messages when they’re not ready. Your current and potential customers will think you’re only concerned about the sale and might avoid doing business with your brand in the future. If you find yourself gaining negative reviews, this can counteract all of the solid work you have been doing.
Developing and distributing valuable content, including ebooks, videos, case studies, and guest posts. This will establish your reputation and can drive customers or leads to perform an action (purchase, subscription, follow, inquiry).
Social media also ranks among the most top marketing channels for low lifetime value customers, providing opportunities in both organic and paid segments. Social media allows you to interact with customers firsthand and build visibility. By curating a brand presence, you’ll find more ease in marketing your products or services.
If you want Accessily to help you with this mission check out our marketplace or schedule a free consultation with us here.