Joseph is the CEO of SnapAds , a company that helps local businesses find, retain and reward customers .
Marketing is often misunderstood as a separate function from the business, but in fact it is extremely important to the success of any company. At its core, marketing is simply understanding your value proposition and presenting it to potential customers. This way, you can attract new business, increase customer lifetime value, and reduce customer churn.
Understanding parameters
There are three key metrics companies should track to understand how to grow their business.
1. Customer Acquisition Cost (CAC). The amount of money spent to acquire a new customer.
2. Customer lifetime value (LTV) .
3. Fatigue. The rate at which customers stop doing business with you.
You need LTV to pass CAC to have a profitable business. This means you need to earn more from your customers than it costs to find or acquire them. There are two main ways to do this: lower CAC and increase LTV.
The role of marketing
Marketing helps reduce CAC by making it easier to attract new customers. For example, you can use marketing to generate leads, increase brand awareness, and drive traffic to your store. Also, the modern form of marketing is rewards and incentives. These are nothing but coupons and discounts that were once offered to previous generations. Rewards and incentives are great marketing tools to help increase your CAC.
It's important to understand that the optimal CAC is not $0. In fact, spending more money on customer acquisition will help your business grow. This is because a customer's first visit to your business is the most difficult part of the customer journey. I find that you have a better chance of convincing them to come back once they become a real customer. The real way to reduce CAC is not to cut costs, but to increase the number of new customers.
An example may help explain this. Let's say you pay new customers $10 as an incentive to join your business. This may seem like a bad plan at first because you want the client to pay you. However, once you become a real customer, you will have the opportunity to earn more money with LTV after the customer returns.
So if we assume your average sale is $8, and you charge $10 for the first visit, and the customer comes back multiple times, you expect to bring in $40 in sales for every $10. This is a growing and profitable business. The magic of this show is that the marketing is actually performance based, meaning these discounts are only paid when a customer walks into a store.
Marketing helps increase LTV by increasing customer loyalty and encouraging repeat purchases. For example, you may use marketing to offer loyalty programs, provide excellent customer service, and personalize marketing communications.
Strategies to increase LTV
Finding ways to keep your customers coming back is key to increasing your LTV. This includes marketing activities such as reminding customers about sales via SMS, promoting in-store events and remembering customers' names at check-in.
Loyalty programs are another great way to increase LTV. These programs reward customers who return to your business. Reward and loyalty programs are particularly effective because they are based on performance. As I said before, this means that you only have to pay a premium when customers come to your store.
Let's extend the above example to explain this. Let's say you offer customers a $10 reward for every tenth visit. This means that you have convinced the customer to come to your store 10 times. The current sale is $80, a total of $20 minus $60. This charm slows rejection and keeps the customer coming back.
Improved CAC, LTV and crap
Here are some specific examples of how marketing can be used to improve CAC, LTV and customer retention.
CAC:
• Use marketing to increase brand awareness and drive traffic to first-time store rewards. For example, at my company, we do this by offering real cash rewards for round-the-clock rides. We ask our customers to scan their receipts to confirm the purchase and then send cash.
• You can get customers through online advertising, social media marketing and email marketing.
Total price:
• Using marketing strategies to increase customer loyalty and encourage repeat purchases through loyalty and rewards programs, excellent customer service, and personalized marketing communications.
• Promote and sell your products and services. This can be done by presenting the product with another product at the time of purchase. Every time we go to a fast food restaurant, we all look at each other and ask. "Would you like fries too?" They call it. This is a time to sell and sell.
Don't panic
• Use marketing to reduce churn by connecting with customers and offering valuable rewards and incentives.
• Identify and solve customer pain points that you have addressed. For example in my company. we're sending an email with the title "Time to Plan Your Next Vacation." In the article, we explain how our solution helped them grow their business and go on vacation. Remembering why they need our product helps get our message across.
Finding new customers is difficult, keeping them is even more difficult. Creating ways to help you find new, rewarding customers is an effective way to grow your business and expand your customer base. Cash incentives are nothing but smart coupons and discounts that are always available. Using reward offers like this gives customers the chance to check out your business and keep coming back.
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