Without customers, your business cannot exist. At least not for long. This is why marketers spend most of their time looking for ways to attract new customers. Growth marketers also create strategies to convert as many leads as possible.
However, they fail to attract customers, get sales and engage them as customers. While these are great short-term goals, real growth happens when a business delights its new customers. It's even better when these customers buy more and recommend others. Word of mouth makes the salesperson's job easier, and loyalty increases customer lifetime value.
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CLV is the engine of business growth. The more a customer buys, the more revenue the business generates. To increase lifetime value, marketers can encourage customers to buy more often or spend more at the same time. A growing number of marketing strategies achieve this by continuing to develop long-term customer relationships. Let's take a closer look at the impact of these methods on lifetime value.
Optimize your conversion rates
Think back to when you learned something new. Did you get it right from the start? Probably no. If you are like most people, it took some trial and error for you to reach the level of understanding you have today.
Growth traders use a similar approach. They use experiential thinking to figure out how to improve every step of the customer journey. Among these steps, one of the most important: acquisition. You can't retain customers if you don't get them first. But it's not uncommon for businesses to struggle with less-than-stellar conversion rates.
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Potential customers come because along the way they learn a brilliant novelty of the company. However, getting them is difficult. Growth marketing strategies often include the reassuring and compelling message that there is nothing wrong with taking the next step. “One of the best ways to increase your conversion rate is to test different value propositions,” says my friend Chris Daley of Smart CRO. “If you find the right value proposition that resonates with a prospect, you can typically increase your conversion rate by 10% to 20%.”
Growth marketers also use more tactical ways to increase conversions by customizing call-to-action buttons on website pages, A/B testing email content, and retargeting options based on their behavior. The idea is to simplify the company's approach so that fewer potential customers leave the acquisition phase. If you like people from the very beginning, it will be much easier for you to maintain relationships later on.
They create loyalty through personalization.
What can stop someone in hyper-competitive markets from thinking that the grass is greener elsewhere? Think about products, cell phone services, and insurance plans. It is difficult for consumers to differentiate between these products and services over time. For them, the basic offer is the same, regardless of the company that offers it.
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So why don't customers walk away because of price or other amenities? Growth marketing strategies try to combat this behavior by personalizing things. You see this in supermarket chain loyalty programs that offer personalized savings. These exclusive discounts are not for random items, but for items that each customer buys regularly. The e-commerce giants are also embracing personalization through subscription services and product recommendations.
In essence, they build a relationship with each client, showing that they know him as a person. Personalization also promotes customer retention by rewarding loyalty and can go beyond shopping. Growth marketing strategies can have unique educational content that adds value to customer relationships.
They provide valuable advice.
Who are you most likely to trust? Someone you just met, or someone who's been with you for years? Most likely, this is someone with whom you have had countless conversations and may have asked for help. Naturally, you will be more skeptical about what a stranger says.
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This human bias helps explain why 86% of consumers trust referral marketing. In fact, they are 50 times more likely to buy products recommended by friends and family. Businesses don't have to put in as much effort to influence referrals as word of mouth is quite persuasive. The icing on the cake is that the lifetime value of referrals is double that of customers who convert through traditional advertising.
An increasing number of marketing strategies are recognizing and harnessing the power of word of mouth. Incentive referral programs are common, but they are not the only viable tactic. Recruiting clients for video review campaigns is another matter. The same goes for using user generated content as brand ambassadors to express your passion for a product or service. Enabling happy customers to speak up for the business often has more impact than can be said alone.
Use Growth Marketing to Increase CLV
Marketers know that customers with higher lifetime value increase company profits. But since high-value customers don't usually start out this way, companies must develop each collaboration to add value. Growth marketing can do this by figuring out what matters to each customer and rewarding them for taking the next step.
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