Customer lifetime Value or LTV is an area of your company that has real value; potentially as much as £100,000 worth of value!
For your company to grow it would be worth your time to first and foremost identify your LTV and then work towards increasing your company’s LTV. If unpacking your LTV sounds too complicated don’t worry our standard dashboards and our modes of operation are here to do the heavy lifting for you!
Obviously, your goal in this context is to unlock the value in your LTV, because this will help you move your company to the next level. To do so it is important for you to be grounded and driven by tried and true goals. Our mission is to help you stay true to these goals.
The first goal we want to help you achieve is increasing your AOV. To do this you need to ask yourself “Do you understand the product buying relationships within your business?” If the answer is no you don’t understand this relationship, then you are missing valuable information.
Understanding the product buying relationship will help you improve your marketing and merchandising. Not only will this information improve your marketing and merchandising but it will help you identify the key similarities and differences between customers with lower and higher value transactions.
The sooner you understand these differences and similarities the sooner you can take action and start to maximize your AOV
Goal number two is to improve your gross margin. Product decisions must be made using accurate margin based data. Simply put, some products sell well at full price while others are more successful when marked down or available with a discount.
It is important that your operational decisions be based on data that accurately reflects and understands what the data is telling you.
By exploring the data you might find that Google is over-promoting certain products within your catalog so this data will help you determine the amount of disproportionate marketing that is taking place and help you correct and focus it on products that need it most.
Ultimately, you need to understand what promotions are working best for your business. If you’re running promotional activity, make sure that you can track the performance of that discount or offer. Then, compare the different promotions for impact and viability so that you can ensure your promo strategy is based on data rather than the finger in the air approach.
Thirdly, it is crucial that you increase your repurchase rate. Exploring and understanding your LTV will help you in your quest. The data will show you that not all your products, product categories and acquisition channels drive or carry the same value of customer.
Exploring the data will lead to understanding key and often subtle differences that will help ensure that you lead with your best foot forward. Putting your best foot forward means knowing what your customers want and ensuring that you have the products to keep them coming back.
The fourth goal you should strive for is to reduce your customer acquisition costs or CAC. Are you guilty of overspending your valuable marketing budget on products that sell out more quickly than they can be replenished?
The most efficient eCommerce businesses are the ones that use accurate stock forecasting data to understand when remaining product sales should come through non-pain channels. This forecasting helps reduce their overall CAC.
The next step in reducing your CAC is to get accurate and relevant data into the hands of your team. Informing your team allows them to be reactive to changes in products, customers and marketing behavior.
It is important to do more than scratch the surface of your data. You need to make sure that your data can be segmented to enable you to understand the difference by store or by shipping country.
Ultimately implementing any of the previously described strategies would in theory bring you higher LTV. Referring back to the £100k figure mentioned in the beginning, would equate to a 1% revenue uplift for a 10m business.
If all of this sounds stressful or overwhelming yet you read this and know these strategies are what your company needs to put you over the top or down the next exciting path of your company’s journey, that is why we are here.
We know these strategies and goals are vital and we strive to achieve them for our customers day in and day out. Let us unpack your data for your data can have the greatest impact for you.