That quote by Israelmore Ayivor, noted inspirational author and blogger, accurately defines the reason why marketers should switch from focusing on conversion rates to lifetime value to achieve long term success. The value of doing so became even more acute after the pandemic was declared as more consumers not only searched online but also tried new products.

LTV

LTV or lifetime customer value is about the sum total of what a customer has invested in the brand. The formula to determine that is simple. All one has to do is take the average price paid by the customer, multiply that by the average number of purchases over a certain period of time, and the average number of years the brand’s customers remain loyal. Once that’s determined, marketers can then direct their strategy and efforts to raise the LTV. There are four ways to achieve that.

Compassion

Understanding each customer and tailoring communication to them is paramount, particularly today. Blanketing them with emails and texts is perceived like junk mail, which they’re tired of and won’t open. Acknowledging and catering to their interests, needs, and desires build a loyal following. Special acknowledgments and even rewards on special occasions like birthdays and anniversaries reinforce that.

Concerns about another wave of COVID-19 can be tempered with messages of assurance about what the brand is doing to minimize the risk of spreading infections among both its employees and customers. This is true even for items that are shipped for one or two-day delivery.

Grow Orders

Aim for larger average orders by encouraging customers to purchase pricier products and/or add more items to their carts. Some customers would be inclined to buy more expensive products or add more items if free shipping was offered. Other popular free shipping options include an offer to accept the slowest shipping option or join the brand’s loyalty program. Large bulk order incentives could also include rewards and discounts. Freebies are also appealing.

Another strategy is to advertise the brand’s lowest-priced item in its category, so it’s prominent on SERP. When consumers visit the site, have options available for larger packs or sizes with incentives.

Repeat Transaction Averages

Irresistible incentives and offers after the first purchase encourage repeat transactions. One way to enhance the chances is by rewarding first-time customers with a discount on their next order. Another is to allow customers to save a record of their purchases on-site, so they have an easier time recalling them. Probably the most effective remains in tailoring messages based on past purchases and offering deals for the same in the future.

Retention Period Growth

According to information technology firm Growcode, returning customers account for a third of all sales and spend 300% more than first-time shoppers. Engaging them and building a community of loyal customers on platforms like Instagram reinforces the connection with the brand. Sharing and participation are invaluable. Strong loyalty programs also promote retention.

Tweaking

Many strategies aren’t 100% successful at the start. Brands employing LTV should conduct A/B tests to measure their effectiveness and make adjustments where necessary. That will help ensure maximum results in the future.

SHARE
Previous articleThe Outlook for Economic Recovery
Next articleTCB: Taking Care of Business
Ronn Torossian is the Founder, President and CEO of New York-based 5W Public Relations. He has overseen the company's rapid growth and expansion to the Inc. 500 list, as well as provided counsel to hundreds of companies, including members of the Fortune 500, Inc. 500 and Forbes 400. His work spans global interests, corporate entities, high-profile individuals, regional business entities, government agencies and academic institutions - both on routine public relations matters and extremely sensitive issues. One of the foremost public relations experts in the U.S., Torossian is known for his aggressive, results-focused orientation, as well as his close working relationships with members of the media, influencers, decision makers, politicians and celebrities. At 5W Public Relations, Torossian's client experience has included programs for Coca-Cola, Microsoft, Anheuser-Busch, Barnes & Noble, Cantor Fitzgerald, IHOP, McDonald's, Evian, EDS, VeriSign, XM Radio, Seagram's, The Loews Regency, Bad Boy Worldwide Entertainment, Marriott Hotels, Vail Resorts, Pamela Anderson, Snoop Dogg, the Government of Israel, and others. Referred to by The New York Post as a "publicity guru," by Fox News as a "high-powered PR CEO," by Tyra Banks as a "crisis management guru," and by CNN as "a leading PR expert," Torossian is regularly featured in and quoted by the media, including by CNN, Fox News Channel, MSNBC, NBC, The New York Times, and others. CBS National News said "Ronn Torossian knows spin," and a New York Times feature story on Torossian referred to him as "The consummate hard-driving, scrappy NY publicist." Earlier in his career, Torossian was a Vice President/Group Director for one of The InterPublic Group's (IPG) largest PR agencies, where he was responsible for significant client growth and successful client programs, including work for Clinique, Fox News Channel, DHL, Hard Rock Café and others. A resident of Manhattan’s Upper West Side, Torossian was named to the Advertising Age "40 Under 40" list, PR Week's "40 Under 40" List, is a regular lecturer at universities and conferences, a member of Young Presidents Organization (YPO) and a board member of numerous non-profit organizations.